JIT variances Natural Gardens makes recyclable pots for plants and uses JIT to manage inventories and...

 

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JIT variances Natural Gardens makes recyclable pots for plants and uses JIT to manage inventories and production. The following are standards for a typical one-gallon pot: Annual Material Standards 32 ounces of Component Xx $0.02 $0.64 2 ounces of Component Y x $0.05 0.10 $0.74 Current Material Standards 27 ounces of Component Xx $0.02 4 ounces of Component Y x $0.05 $0.54 0.20 $0.74 In-house experiments indicated that changing the material standard would make the pots stronger, so the company issued an engineering change order for the product in February; this ECO established the current material standards. March production was 12,800 pots. Usage of raw material (all purchased at standard price) in March was 352,000 ounces of Component X and 49,600 ounces of Company Y. Calculate the material quantity variance and the engineering change order (ECO) material variance. Note: Do not use a negative sign with your answer. Material quantity variance $ 48 ✓ Favorable ECO material variance $ 48 X Favorable X X JIT variances Natural Gardens makes recyclable pots for plants and uses JIT to manage inventories and production. The following are standards for a typical one-gallon pot: Annual Material Standards 32 ounces of Component Xx $0.02 $0.64 2 ounces of Component Y x $0.05 0.10 $0.74 Current Material Standards 27 ounces of Component Xx $0.02 4 ounces of Component Y x $0.05 $0.54 0.20 $0.74 In-house experiments indicated that changing the material standard would make the pots stronger, so the company issued an engineering change order for the product in February; this ECO established the current material standards. March production was 12,800 pots. Usage of raw material (all purchased at standard price) in March was 352,000 ounces of Component X and 49,600 ounces of Company Y. Calculate the material quantity variance and the engineering change order (ECO) material variance. Note: Do not use a negative sign with your answer. Material quantity variance $ 48 ✓ Favorable ECO material variance $ 48 X Favorable X X

Answer rating: 100% (QA)

Solution Materials quantity variance 48 ECO Materials Variance 48 Ac... View the full answer