Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 21

A Swiss firm, Smythe and Yves (S Y), manufactures toiletries such as hand soaps, shampoo, conditioners, and a mouthwash that hotels purchase and place in the rooms for their guests. S Y uses a standard cost system. One of the fragrances the company inserts in some bath and face soaps uses a particular scent, VBN032, that has a standard price of 600 CHF (Swiss francs) per liter. S Y purchased 15 liters of VBN032 for 9,225 CHF. Prior to this purchase, S Y had no VBN032 in inventory. Immediately upon delivery of VBN032, three jobs (#K8925, #G1342, and #R9823) were started that used VBN032. The following table summarizes the actual and standard quantities (in liters) of VBN032 in the three jobs:
Required:
a. Prepare a table that reports how the 9,225 CHF purchase cost of VBN032 is distributed across S Y's manufacturing accounts after VBN032 has been used in the three jobs.
b. Based on your analysis in part (a), what observations would you offer to management