Logan Fruit Drink Company planned to make 204.000 containers of apple juice. It

Question

Logan Fruit Drink Company planned to make 204.000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of Juice, thus using 408,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.24. Logan actually paid S124,845.00 to purchase 416,150 cups of concentrate, which was used to make 205,000 containers of apple Juice. Required: Compute the actual price per cup of concentrate. (Round your answer to 2 decimal places.) Compute the standard quantity (number of cups of concentrate) required to produce the containers. Compute the materials price variance and indicate whether It Is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e.. zero variance). Round your answer to 2 decimal places.)

Explanation / Answer

standard actual units 204000 205000 raw material 2 cups total cups 408000 416150 price 0.24 total cost 97920 124845 b) Actual price per cup total cost 124845 Total cups bought 416150 Actual price (124845 / 416150) 0.30 c) Total units produced 205000 Standard quantity required 2 cups Standard quantity ( 205000 * 2) 410000 d) Material pric variance = (Actual price - standard price) * Actual quantity = ( 0.30 - 0.24) * 416150 = 0.06 * 416150 = 24969 Unfavourable

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