Standard Product Cost, Direct Materials Varlance Condiments Company uses standar

Question

Standard Product Cost, Direct Materials Varlance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (1,600 pounds) has the following standards: Standard Quantity Standard Price Whole tomatoes Vinegar Corn syrup Salt 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: 2,800 lbs. of tomatoes 144 gal. of vinegar 14 gal. of corn syrup 59 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 Whole tomatoes Vinegar Corn syrup Salt Total Standard unit materials cost per pound 2,700 lbs. 0.41 per lb 150 gal. $2.50 per ga. 13 gal 60 lbs. 2.30 per lb. $9.10 per ga. Standard Cost per Batch

Explanation / Answer

Calculation of standard unit material cost per pound

Calculation of Direct Material Quantity Variances

Direct material Quantity Variance (DMQV) = Std. price x ( Std. quantity - Actual quantity )

DMQV (for whole tomatoes) = 0.41 x ( 2700 - 2800 )

= 41 (Unfavorable)

DMQV (for vinegar) = 2.5 x ( 150 - 144 )

= 15 (favorable)

DMQV (for corn syrup) = 9.10 x ( 13 - 14 )

= 9.10 (Unfavorable)

DMQV (for salt) = 2.3 x ( 60 - 59 )

= 2.3 (favorable)

Total direct material quantity variance = - 41 + 15 - 9.10 + 2.3

= 32.8 ( unfavorable)

Ingredient Std. Qty. Std. Price Std. Cost Whole tomatoes 2,700 lbs 0.41 per lb 1,107 Vinegar 150 gal 2.5 per gal 375 Corn syrup 13 gal 9.10 per gal 118.3 Salt 60 lbs 2.30 per lb 138 Total 1,738.3 Std. unit material cost per pound 1738.3/1600= 1.09

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.