Question

Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,900 pounds) has the following standards:

	Standard Quantity		Standard Price
Whole tomatoes	3,200	lbs.	$ 0.52	per lb.
Vinegar	180	gal.	$ 3.20	per gal.
Corn syrup	15	gal.	$ 11.60	per gal.
Salt	72	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:

3,300 lbs. of tomatoes

173 gal. of vinegar

16 gal. of corn syrup

71 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	$
Vinegar	$
Corn syrup	$
Salt	$
Total	$
Standard unit materials cost per pound	$

b.  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.

Ingredient	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	$
Vinegar	$
Corn syrup	$
Salt	$
Total direct materials quantity variance	$

Answer 1

Answers

[a]

Ingredient	Standard quanity	Standard price	Standard Cost per Batch
Whole tomatoes	3,200	$                                      0.52	$                   1,664.00
Vinegar	180	$                                      3.20	$                      576.00
Corn syrup	15	$                                    11.60	$                      174.00
Salt	72	$                                      2.90	$                      208.80
Total			$                   2,622.80
Standard unit materials cost per pound			$                         1.38

[b]

Ingredient	Standard quanity	Actual Quantity	Difference	Standard price	Materials Quantity Variance	Favorable/Unfavorable
Whole tomatoes	3,200	3,300	100	$                                 0.52	$          52.00	Unfavourable
Vinegar	180	173	(7)	$                                 3.20	$         (22.40)	Favourable
Corn syrup	15	16	1	$                               11.60	$          11.60	Unfavourable
Salt	72	71	(1)	$                                 2.90	$           (2.90)	Favourable
Total direct materials quantity variance					$          38.30	Unfavourable