A Swiss firm, Smythe and Yves ( S& Y), manufactures toiletries such as hand soaps, shampoo, conditioners, and a mouthwash that hotels purchase and place in the rooms for their guests. S& Y uses a standard cost system. One of the fragrances the company inserts in some bath and face soaps uses a particular scent, VBN032, that has a standard price of 600 CHF ( Swiss francs) per liter. S& Y purchased 15 liters of VBN032 for 9,225 CHF. Prior to this purchase, S& Y had no VBN032 in inventory. Immediately upon delivery of VBN032, three jobs (# K8925, # G1342, and # R9823) were started that used VBN032. The following table summarizes the actual and standard quantities ( in liters) of VBN032 in the three jobs:

Required:

a. Prepare a table that reports how the 9,225 CHF purchase cost of VBN032 is distributed across S& Y’s manufacturing accounts after VBN032 has been used in the three jobs.

b. Based on your analysis in part (a), what observations would you offer to management?

Transcribed Image Text:

Actual Standard Quantity Quantity #K8925 4.38 4.19 #G1342 6.46 6.35 3.61 #R9823 3.78