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...

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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"…
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