Standard Product Cost, Direct Materials Variance Condiments Company uses standar

Question

Standard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (2,600 pounds) has the following standards: Standard Standard Quantity Price Whole $ per 4,300 lbs. tomatoes 0.49 lb per gal. per gal. per lb Vinegar 240 gal Corn syrup 21 gal. 10.9 Salt 96 lbs. 2.7 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: 4,500 lbs. of tomatoes 230 gal. of vinegar 22 gal. of corn syrup 95 lbs. of salt

Explanation / Answer

A.

B.

Standard

Price

Standard quantity × standard price = standard cost per batch Whole tomatoes 4300 $0.49 $2,107 Vinegar 240 $3 $720 Corn syrup 21 $10.9 $228.90 Salt 96 $2.7 $259.20 Total $3,315.10 Pounds per batch 2600 Standard unit material cost per pound $1.28 per lb

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