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E11-14 Picard Landscaping plants grass seed

Price: $1.99


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.

Instructions
(a) Prepare a variance report for the purchasing department with the following columns:
(1) Project, (2) Actual Pounds Purchased, (3) Actual Price, (4) Standard Price, (5) Price
Variance, and (6) Explanation.
(b) Prepare a variance report for the production department with the following columns:
(1) Project, (2) Actual Pounds, (3) Standard Pounds, (4) Standard Price, (5) Quantity
Variance, and (6) Explanation.

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