tandard Product Cost, Direct Materials Variance Condiments Company uses standards to control its materials costs. Assume that a batch of ketchup (900 pounds) has the following standards: Standard Quantity Standard Price 1,500 lbs. $0.40 per lb. Whole tomatoes Vinegar 80 gal. 2.40 per gal. Corn syrup 7 gal. 8.90 per gal. Salt 32 lbs. 2.20 per lb. The actual materials in a batch may vary from the standard due to tomato characteristics. Assume that the actual quantities of materials for batch 08-99 were as follows: 1,600 lbs. of tomatoes 77 gal. of vinegar 8 gal. of corn syrup 31 lbs. of salt a. Determine the standard unit materials cost per pound for a standard batch. If required, round amounts to the nearest cent. Standard Cost per Batch Ingredient Whole tomatoes Vinegar Corn syrup Salt 3000

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for …

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on t…