H.J. Heinz Company uses standards to control its materials costs. Assume that a
ID: 2352857 • Letter: H
Question
H.J. Heinz Company uses standards to control its materials costs. Assume that a batch of ketchup (1,500 pounds) has the following standards:standard Quantity Standard Price
Whole Tomatoes 2400 lbs $.45/lb
vinegar 160 gal 2.75/gal
Corn syrup 14 gal 10/gal
Salt 62 lbs 2.50/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-54 were as follows:
2540 lb of Tomatoes
164 gal of Vinegar
13 gal of corn syrup
60 lbs of salt
Determine the direct materials quantity variance for batch K-54. Round all per unit answers to the nearest whole cent. Use the minus sign to enter favorable variances as negative numbers.
Quantity Materials Quantity Variance
2,540 $ ???
164 $ ???
13 $ ???
60 $ ???
Total direct materials quantity variance: $ ???
Explanation / Answer
Materials quantity variance = SP(AQ-SQ) = Quantity Materials Quantity Variance 2,540 $ .45*(2540 – 2400) = 63.00 164 $ $ 2.75*(164 – 160) = 11.00 13 $ 10*(13 – 14) = -10.00 60 $ 2.50*(60-62) = -5.00 Total direct materials quantity variance: 59.00, which is unfavorable
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