variances, food processing.
(50 min)
1
The direct materials standard to produce 80 kg of tropical fruit salad are
50 kg of pineapple 30 kg of watermelon and 20 kg of mango. Therefore, budgeted input allowed for each kg of tropical fruit salad Pineapples
50 kg ÷ 80 kg
=
0.625 kg Watermelons
30 kg ÷ 80 kg
=
0.375 kg Mango
20 kg ÷ 80 kg
=
0.250 kg
All fruit
1.250 kg Budgeted input allowed for 54,000 kg of tropical fruit salad
Pineapples
54,000
× 0.625
=
33,750 kg
Watermelons
54,000
× 0.375
=
20,250 kg
Mango 54,000
× 0.25
=
13,500 kg
All fruit
67,500 kg Solution Exhibit A presents the total direct materials price and efficiency variances for Tropica, AB for October. The total direct materials price variances can also be calculated as Direct materials price variance for each input = Actual price – Budgeted price Actual inputs Pineapples
= (SFr 0.90 – SFr 1.00)
× 36,400 = SFr 3,640 F Watermelons = (SFr 0.60 – SFr 0.50)
×18,200 = 1,820 U Mango
= (SFr 0.70 – SFr 0.75)
× 15,400 = 770 F Total direct materials price variance
SFr 2,590 F The direct materials efficiency variances can also be calculated as Direct materials efficiency variance for each input = Actual inputs used Budgeted inputs allowed for actual output achieved × Budgeted price Pineapples
= (36,400 – 33,750)
× SFr 1.00 = SFr 2,650 U Watermelons
= (18,200 – 20,250)
× SFr 0.50 =
1,025 F Mango
= (15,400 – 13,500)
× SFr 0.75 = 1,425 U Total direct materials efficiency variance
SFr 3,050 U
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 Share with your friends: |
