Question

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,200 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes 2,000 lbs. $0.52 per lb. Vinegar 110 gal. $ 3.20 per gal. Corn syrup 9 gal. $11.60 per gal. Salt 44 lbs. $ 2.90 per lb. The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch K-111 were as follows: 2,100 lbs. of tomatoes 106 gal. of vinegar 10 gal. of corn syrup 43 lbs. of salt a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent. Ingredient Standard Cost per Batch Whole tomatoes $ 1,040 Vinegar 352 Corn syrup $ 104.4 Salt $ 127.6 Total $ 1,624 Standard unit materials cost per pound 1.35

Determine the direct materials quantity variance for batch K-111. If required, round amounts to the nearest cent. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Answer 1

Answer

• Requirement [a] is complete and correct
• Requirement [b]

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	$          52.00	Unfavourable
Vinegar	$         (12.80)	Favourable
Corn syrup	$          11.60	Unfavourable
Salt	$           (2.90)	Favourable
Total direct materials quantity variance	$          47.90	Unfavourable

--Working

Ingredient	Standard quanity	Actual Quantity	Difference	Standard price	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	2,000	2,100	100	$                                 0.52	$          52.00	Unfavourable
Vinegar	110	106	(4)	$                                 3.20	$         (12.80)	Favourable
Corn syrup	9	10	1	$                               11.60	$          11.60	Unfavourable
Salt	44	43	(1)	$                                 2.90	$           (2.90)	Favourable
Total direct materials quantity variance					$          47.90	Unfavourable