Question

Logan Fruit Drink Company planned to make 200,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 400,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.60. Logan actually paid $249,550 to purchase 402,500 cups of concentrate, which was used to make 201,000 containers of apple juice.

Required
a. Are flexible budget materials variances based on the planned volume of activity (200,000 containers) or actual volume of activity (201,000 containers)?
b. Compute the actual price per cup of concentrate.
c. Compute the standard quantity (number of cups of concentrate) required to produce the containers.
d. Compute the materials price variance and indicate whether it is favorable (F) or unfavorable (U).
e. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U).



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  • CreatedFebruary 07, 2014
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