What is the material quantity variance for salad ingredients? What is the materi

Question

What is the material quantity variance for salad ingredients?

What is the material quantity variance for salad dressing?

Given the following information:

Individual Project 3 Variance Analysis – 50 points Due in class March 20th, 2018 Sarah's Salad Supplier is a high-end producer of different pre-packaged salads that are sold to some of the best restaurants in the world. Following is the company's April contribution report comparing budgeted and actual results for their chicken salad. Actual 24,700 Static Budget 25,000 Chicken salad sold Revenues 494,000 500,000 Direct materials: Chicken Salad Ingredients Salad Dressing Direct labor Variable overhead Total variable costs Contribution margin 204,930 133,425 19,240 38,400 51,800 447,795 46,205 210,000 135,000 18,750 40,000 50,000 453,750 46,250 Standard costs for one chicken salad are Chicken 1.2 pounds @ $7.00/pound Salad Ingredients 12 ounces @ $0.45/ounce Salad Dressing 0.6 ounces @ $1.25/ounce Direct labor $9.60/hour (10 minutes per unit at $0.16 per minute) Variable OH $12.00/hour (10 minutes per unit at $0.20 per minute) Variable overhead is applied on the basis of direct labor hours Accounting and production records indicate that the company purchased and used the following quantities during the month. Purchased Used Chicken 30,000 pounds 29,700 pounds Salad Ingredients 296,400 ounces 296,500 ounces Salad Dressing 15,000 ounces 14,800 ounces Direct labor 4,000 hours

Explanation / Answer

Material quantity variance = (Standard quantity-actual quantity)Standard price

         Salad Ingredients = (24700*12-296500)*0.45 = 45 U

         Salad Dressing = (24700*.6-14800)*1.25 = 25 F

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