Financial Planning, Performan Plasto Incorporated manufactures and sells arboxal, a chemical used in the manufacture of plastic. To produce arboxal, Plasto uses three direct materials arcol, bonal and oxal Because of evaporation during a chemical reaction in the production of arboxal, Plasto expects a standard yield of 90%. That is, every 10 gallons of arcol, bonal, and oxal yields 9 gallons of arboxal. The standard mix of direct materials is 60% of arcol, 20% of bonal, and 20% of oxal Plasto set the following direct material standards for the production of arboxal 6 gallons of arcol at $1.00/gallon 2 gallons of bonal at $1.00/gallon $6.00 2.00 2 gallons of oxal at $.50/gallon 1.00 gallons of input yielding 9 gallons of 10 $9.00 Farboxal Plasto produced 45,000 gallons of arboxal using the following quantities and costs. 26,000 gallons of arcol at $1.05/gallon 13,000 gallons of bonal at $.85/gallon 13.000 gallons of oxal at $.40/gallon 52.000 gallons at the total cost of $27,300 11,050 5.200 $43.550 Plasto carries direct material inventories at actual prices. What is the total material price variance for arboxal?
Financial Planning, Performan Plasto Incorporated manufactures and sells arboxal, a chemical used in the manufacture of plastic. To produce arboxal, Plasto uses three direct materials arcol, bonal and oxal Because of evaporation during a chemical reaction in the production of arboxal, Plasto expects a standard yield of 90%. That is, every 10 gallons of arcol, bonal, and oxal yields 9 gallons of arboxal. The standard mix of direct materials is 60% of arcol, 20% of bonal, and 20% of oxal Plasto set the following direct material standards for the production of arboxal 6 gallons of arcol at $1.00/gallon 2 gallons of bonal at $1.00/gallon $6.00 2.00 2 gallons of oxal at $.50/gallon 1.00 gallons of input yielding 9 gallons of 10 $9.00 Farboxal Plasto produced 45,000 gallons of arboxal using the following quantities and costs. 26,000 gallons of arcol at $1.05/gallon 13,000 gallons of bonal at $.85/gallon 13.000 gallons of oxal at $.40/gallon 52.000 gallons at the total cost of $27,300 11,050 5.200 $43.550 Plasto carries direct material inventories at actual prices. What is the total material price variance for arboxal?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 25P: Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio...
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