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Question - SunRipe produces low calorie grape juice. The company developed the following standard costs for a case of juice:
Grams
Cost per Gram
Total Cost
Direct materials
50
$0.25
$12.50
The actual results for the year are:
Units produced (cases) 25,000
Direct materials purchased and used (grams) 1,325,000
Direct materials cost per gram $0.24
Required - Calculate the direct material price and usage (also called efficiency) variances and use your solution to answer the following questions.
Indicate if the direct material price variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
Indicate if the direct material usage variance is favourable (enter the letter F) or unfavourable (enter the letters UF).
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