Picard Landscaping plants grass seed as the basic landscaping for business campu
ID: 2479066 • 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
(a)
Prepare a variance report for the purchasing department. (Round actual and standard price per pound answers to 2 decimal places e.g. 1.25.)
PICARD LANDSCAPING
Variance Report – Purchasing Department
For the Current Month
Project
Actual
Pounds
Purchased
Actual
Price Per
Pound
Standard
Price Per
Pound
Price
Variance
(b)
Prepare a variance report for the production department. (Round standard price per pound to 2 decimal places, e.g. 1.25.)
PICARD LANDSCAPING
Variance Report – Production Department
For the Current Month
Project
Actual
Pounds
Standard
Pounds
Standard
Price Per
Pound
Quantity
Variance
Actual
Standard
Project Quantity Costs Quantity Costs Total Variance Remington 530 lbs. $1,272 420 lbs. $1,050 $222 U Chang 400 880 410 1,025 145 F Wyco 600 1,560 500 1,250 310 U Total variance $387 UExplanation / Answer
Answer:
(a)
Variance report for the purchasing department:
(b)
Variance report for the production department.
/Unfavourable(U) Remington 530 =1272/530= 2.40 =1050/420 = 2.50 53 F Chang 400 2.20 2.50 120 F Wyco 600 2.60 2.50 -60 U Total variance 113 F