H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (3,128 pounds) has the following standards:                                           Standard Quantity              Standard Price Whole tomatoes                       4,000 lbs.                      $ 0.60 per lb. Vinegar                                       260 gal.                          2.25 per gal. Corn syrup                                   25 gal.                         28.00 per gal. Salt                                              100 lbs.                          2.25 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: 4,250 lb. of tomatoes 275 gal. of vinegar 22 gal. of corn syrup 90 lb. of salt a. Determine the standard unit materials cost per pound for a standard batch. Round the per unit answer to the nearest whole cent. b. Determine the direct materials quantity variance for batch K-111. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to the nearest cent.

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter23: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 7E: H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup...
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Standard Product Cost, Direct Materials Variance

H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (3,128 pounds) has the following standards:

                                          Standard Quantity              Standard Price
Whole tomatoes                       4,000 lbs.                      $ 0.60 per lb.
Vinegar                                       260 gal.                          2.25 per gal.
Corn syrup                                   25 gal.                         28.00 per gal.
Salt                                              100 lbs.                          2.25 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:

4,250 lb. of tomatoes
275 gal. of vinegar
22 gal. of corn syrup
90 lb. of salt

a. Determine the standard unit materials cost per pound for a standard batch. Round the per unit answer to the nearest whole cent.

b. Determine the direct materials quantity variance for batch K-111. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to the nearest cent.

 



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