Question: Topiary Co produces molded plastic garden pots and other plastic

Topiary Co. produces molded plastic garden pots and other plastic containers. In June 2014, Topiary produces 1,000 lots (each lot is 12 dozen pots) of its most popular line of pots, the 14-inch “Grecian urns,” at each of its two plants, which are located in Mineola and Bayside. The production manager, Janice Roberts, asks her assistant, Alastair Ramy, to find out the precise per-unit budgeted variable costs at the two plants and the variable costs of a competitor, Land Art, who offers similar-quality pots at cheaper prices. Ramy pulls together the following information for each lot:

1. What is the budgeted variable cost per lot at the Mineola Plant, the Bayside Plant, and at Land Art?
2. Using the Land Art data as the standard, calculate the direct materials and direct labor price and efficiency variances for the Mineola and Bayside plants.
3. What advantage does Topiary get by using Land Art’s benchmark data as standards in calculating its variances? Identify two issues that Roberts should keep in mind in using the Land Art data as thestandards.
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  • CreatedMay 14, 2014
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