Actual Standard PINA LANDSCAPING Variance Report – Purchasing Department For the
ID: 2394737 • Letter: A
Question
Actual
Standard
PINA LANDSCAPING
Variance Report – Purchasing Department
For the Current Month
Project
Actual
Pounds Purchased
Actual
Price Per Pound
Standard
Price Per Pound
Price Variance
Explanation
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PINA LANDSCAPING
Variance Report – Production Department
For the Current Month
Project
Actual Pounds
Standard Pounds
Standard
Price Per Pound
Quantity Variance
Explanation
Open Show Work
Pina Landscaping plants grass seed as the basic landscaping for business campuses. During a recent month, the company worked on three projects (Remington, Chang, and Wyco). The company is interested in controlling the materials costs, namely the grass seed, for these plantings projects.In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality seed for the Remington project. The Chang project, however, received higher-than-standard-quality seed that was on sale. The Wyco project received standard-quality seed. However, the price had increased and a new employee was used to spread the seed.
Shown below are quantity and cost data for each project.
Actual
Standard
Project Quantity Costs Quantity Costs Total Variance Remington 520 lbs. $1,248 430 lbs. $1,118 $130 U Chang 400 920 410 1,066 146 F Wyco 590 1,593 520 1,352 241 U Total variance $225 UExplanation / Answer
Project
Actual Pounds purchased
Actual
Price Per Pound
Standard
Price Per Pound
Price Variance
Explanation
Remington
520
2.4
2.6
104
Favourable
Purchased poor-quality seeds
Chang
400
2.3
2.6
120
Favourable
Seeds on sale
Wyco
590
2.7
2.6
59
Unfavourable
Price Increased
Total price variance
165
Favourable
Price Variance = (SR – AR) * AQ
Remington = (2.6 – 2.4) * 520 = 104 (F)
Chang = (2.6 – 2.3) * 400 = 120 (F)
Wyco = (2.6 – 2.7) * 590 = 59 (U)
Project
Actual Pounds
Standard Pounds
Standard
Price Per Pound
Quantity Variance
Explanation
Remington
520
430
2.6
234
Unfavourable
Purchased poor-quality seeds
Chang
400
410
2.6
26
Favourable
Purchased higher-quality seeds
Wyco
590
520
2.6
182
Unfavourable
New employee
Total quantity variance
390
Unfavourable
Quantity Variance = (SQ – AQ) * SR
Remington = (430 – 520) * 2.6 = 234 (U)
Chang = (410 – 400) * 2.6 = 26 (F)
Wyco = (520 – 590) * 2.6 = 182 (U)
Project
Actual Pounds purchased
Actual
Price Per Pound
Standard
Price Per Pound
Price Variance
Explanation
Remington
520
2.4
2.6
104
Favourable
Purchased poor-quality seeds
Chang
400
2.3
2.6
120
Favourable
Seeds on sale
Wyco
590
2.7
2.6
59
Unfavourable
Price Increased
Total price variance
165
Favourable
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