Wilkin Fruit Drink Company planned to make 400,000 containers of apple juice. It expected to use two cups of frozen appleconcentrate to make each container of juice, thus using 800,000 cups (400,000 containers x 2 cups) of frozen concentrate.The standard price of one cup of apple concentrate is $0.25. Actually, Wilkin produced 404,000 containers of apple juice andpurchased and used 820,000 cups of concentrate at $0.26 per cup.Requireda. Complete the spreadsheet template to calculate price and usage variances.Spreadsheet Tips2. The cells that label the variances as F or U (favorable (F) or unfavorable (U)) are based on a function called IF. The IFfunction is needed because the variance can be either favorable or unfavorable. The formula must determine whether actualexpenditures exceed budgeted expenditures to determine whether the variance is unfavorable or favorable. As an example,the formula in cell D22 is =IF(B21>E21,"U","F"). The formula evaluates the expression B21>E21. If this expression is true (B21is greater than E21), the text U is inserted in cell D22. The IF function can also be used to place formulas or numbers in a cellbased on whether an expression is true or false. For example, the formula =IF(B21>E21,B21-E21,E21-B21) would calculatethe amount of the variance as a positive number regardless of which amount is larger.3. An easier way to make the variance a positive number regardless of whether it is favorable or unfavorable is to use theabsolute value function. The format of the formula in cells C22 and F22 would be =ABS(left number - right number).5. Explore the power of formulas by copying cells A13:H23 into the scratchpad area below. There you will be able to modifythe actual quantity, standard quantity, actual price, standard price, actual units, and standard per unit to see the resultingchanges in the variances.Actual QuantityXActual PriceXPrice VarianceTemplate for Price and Usage VariancesActual QuantityStandard PriceXUsage VarianceActual UnitsXStandard per unitStandard QuantityStandard Price400,000 800,000404,000 820,000X2$0.26$0.25

1. Material price variance: (The difference between the Standard Price and Actual Price for the…

Answered: o calculate price and usage variances.

Business

Accounting

o calculate price and usage variances.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter11: Strategic Cost Management

Section: Chapter Questions

Problem 21E: This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total...

See similar textbooks

Similar questions

Solomon 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 $0.23. Solomon actually paid $126,489 to purchase 408,030 cups of concentrate, which was used to make 201,000 containers of apple juice. Required: b. Compute the actual price per cup of concentrate. (Round your answer to 2 decimal places.) 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). (Select "None" if there is no effect (i.e., zero variance). Round "Price variance" to 2 decimal places.) e. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance). Round "Usage variance"…
Gibson Fruit Drink Company planned to make 203,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 406,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.24. Gibson actually paid $115,954 to purchase 414,120 cups of concentrate, which was used to make 204,000 containers of apple juice. Required: b. Compute the actual price per cup of concentrate. Note: Round your answer to 2 decimal places. 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). Note: Select "None" if there is no effect (i.e., zero variance). Round "Price variance" to 2 decimal places. e. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U). Note: Select "None" if there is no effect (i.e., zero variance). Round "Usage…
Zachary Fruit Drink Company planned to make 202,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 404,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.23. Zachary actually paid $115,385 to purchase 412,090 cups of concentrate, which was used to make 203,000 containers of apple juice. Required: b. Compute the actual price per cup of concentrate. (Round your answer to 2 decimal places.) 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). (Select "None" if there is no effect (i.e., zero variance). Round "Price variance" to 2 decimal places.) e. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance). Round "Usage variance"…
Sagar
Noble Chemical has spent $240,000 to refine 71,000 gallons of acetone, which can be sold for $2.30 a gallon. Alternatively, Noble Chemical can process the acetone further. This processing will yield a total of 59,000 gallons of lacquer thinner that can be sold for $3.20 a gallon. The additional processing will cost $0.85 per gallon of lacquer thinner. To sell the lacquer thinner, Noble Chemical must pay shipping of $0.24 a gallon and administrative expenses of $0.12 a gallon on the thinner. Requirements: 1. Identify the sunk cost. Is the sunk cost relevant to Noble's decision? Why or why not? 2. Should Noblesell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives.
Smith Chemical has spent $244,000 to refine 73,000 gallons of acetone, which can be sold for $2.40 a gallon. Alternatively, Smith Chemical can process the acetone further. This processing will yield a total of 58,000 gallons of lacquer thinner that can be sold for $3.30 a gallon. The additional processing will cost $0.55 per gallon of lacquer thinner. To sell the lacquer thinner, Smith Chemical must pay shipping of $0.18 a gallon and administrative expenses of $0.10 a gallon on the thinner. Requirements 1. Identify the sunk cost. Is the sunk cost relevant to Smith's decision? Why or why not? 2. Should Smith sell the acetone as is or process it into lacquer thinner? Show the expected net revenue difference between the two alternatives. ..... Requirement 1. Identify the sunk cost. Is the sunk cost relevant to Smith's decision? Why or why not? The is a sunk cost that differ between alternatives of selling as is or processing further. Consequently, this sunk cost of is to the sell or…
The Mighty Music Company produces and sells a desktop speaker for $200. The company has the capacity to produce 60,000 speakers each period. At capacity, the costs assigned to each unit are as follows: Unit-level costs Product-level costs Facility-level costs The company has received a special order for 11,000 speakers. If this order is accepted, the company will have to spend $20,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order? Multiple Choice O O $96.82 $146.82 $104.32 $95 $25 $15 $107.32
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?A. Profits will decrease by $1,200.B. Profits will increase by $31,200.C. Profits will increase by $600.D. Profits will increase by $7,200.
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case.The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Curate Furniture approached Jansen about buying 1,200 shelves for bookshelves it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jensen accepts the special order?
General Mills makes Nature Valley granola bars, Cheerios cereal, Yoplait yogurt, Haagen-Dazs ice cream and many other food products. Suppose the product manager of a new General Mills cereal has determined that the appropriate wholesale price for a carton of the cereal is $48. Fixed costs of the production and marketing of the cereal is $19 million. 1 The product manager estimates that she can sell 800,000 cartons at the $48 price. What is the largest variable cost per carton that General Mills can pay and still achieve 2 profit of §t million? 2 Suppose the variable cost is $25 per carton. What profit (or loss) would General Mills expect?
Broomfield Corp. has 1,000 carton of oranges that cost $50 per carton in direct costs and $26.50 per carton in indirect costs and sold for $70 per carton. The oranges can be processed further into orange juice at an additional cost of $22.50 and sold at a price of $126. The incremental income (loss) from processing the oranges into orange juice would be: Multiple Choice ($100,500). $103,500. $92,500. $100,500. $93,500.