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Question - Perez Fruit Drink Company planned to make 196,000 containers of apple juice. It expected to use two cups of frozen apple concentrate to make each container of juice, thus using 392,000 cups of frozen concentrate. The standard price of one cup of apple concentrate is $0.23. Perez actually paid $115,974 to purchase 399,910 cups of concentrate, which was used to make 197,000 containers of apple juice.
Required -
a. Compute the actual price per cup of concentrate.
b. Compute the standard quantity (number of cups of concentrate) required to produce the containers.
c. Compute the materials price variance and indicate whether it is favorable (F) or unfavorable (U).
d. Compute the materials usage variance and indicate whether it is favorable (F) or unfavorable (U).
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