Picard Landscaping plants grass seed as the basic landscaping for business campu
ID: 2380251 • Letter: P
Question
Picard Landscaping plants grass seed as the basic landscaping for business campuses. During a recent month the company worked on three projects (Remington, Chang, and Wyco). The company is interested in controlling the materials costs, namely the grass seed, for these plantings projects.
In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality seed for the Remington project. The Chang project, however, received higher-than-standard-quality seed that was on sale. The Wyco project received standard-quality seed. However, the price had increased and a new employee was used to spread the seed.
Shown below are quantity and cost data for each project.
Actual
Standard
Project
Quantity
Costs
Quantity
Costs
Total Variance Remington
520 lbs.
$1,274
480 lbs.
$1,248
$26 U Chang
410
902
420
1,092
190 F Wyco
560
1,512
540
1,404
108 U Total variance
$-56 U Picard Landscaping plants grass seed as the basic landscaping for business campuses. During a recent month the company worked on three projects (Remington, Chang, and Wyco). The company is interested in controlling the materials costs, namely the grass seed, for these plantings projects. In order to provide management with useful cost control information, the company uses standard costs and prepares monthly variance reports. Analysis reveals that the purchasing agent mistakenly purchased poor-quality seed for the Remington project. The Chang project, however, received higher-than-standard-quality seed that was on sale. The Wyco project received standard-quality seed. However, the price had increased and a new employee was used to spread the seed. Shown below are quantity and cost data for each project.
Explanation / Answer
Actual Pounds Purchased Actual Price Standard Price Price Variance Remington 520.00 2.45 2.60 -78 Chang 410.00 2.20 2.60 -164 Wyco 560.00 2.70 2.60 56 Total Price Variance -186 Actual Pounds Purchased Standard Pound Standard Price Price Variance Remington 520.00 480.00 2.60 104.00 Chang 410.00 420.00 2.60 -26.00 Wyco 560.00 540.00 2.60 52.00 Total Volume Variance 130.00