Exercise 23-14 Your answer is partially correct. Try again Picard Landscaping pl
ID: 2524616 • Letter: E
Question
Exercise 23-14 Your answer is partially correct. Try again Picard 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 Remington Chang Wyco Quantity Costs Quantity Costs Total Variance 510 lbs 400 610 $1,025 1,025 1,250 $199 U 105 F 336 U $430 U $1,224410 lbs 920 410 1,586500 Total varianceExplanation / Answer
Solution:
Part a
Picard Landscaping
Variance Report - Purchasing Department
For the current month
Project
Actual Pounds Purchased
Actual Price Per Pound
Standard Price per pound
Price Variance
[(Actual Price – Std Price)*Actual Pounds Purchased]
Remington
510
$2.40
$2.50
(1025 / 410)
51
Favorable
Chang
400
$2.30
$2.50
(1025 / 410)
80
Favorable
Wyco
610
$2.60
$2.50
(1250 / 500)
61
Unfavorable
Total Price Variance
70
Favorable
Part b
Picard Landscaping
Variance Report – Production Department
For the current month
Project
Actual Pounds
Standard Pounds
Standard Price per pound
Quantity Variance
[(Actual Pounds – Std Pounds)*Std Price]
Remington
510
410
$2.50
$250
Unfavorable
Chang
400
410
$2.50
$25
Favorable
Wyco
610
500
$2.50
$275
Unfavorable
Total Quantity Variance
$500
Unfavorable
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Picard Landscaping
Variance Report - Purchasing Department
For the current month
Project
Actual Pounds Purchased
Actual Price Per Pound
Standard Price per pound
Price Variance
[(Actual Price – Std Price)*Actual Pounds Purchased]
Remington
510
$2.40
$2.50
(1025 / 410)
51
Favorable
Chang
400
$2.30
$2.50
(1025 / 410)
80
Favorable
Wyco
610
$2.60
$2.50
(1250 / 500)
61
Unfavorable
Total Price Variance
70
Favorable
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