Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob- lems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost S 12,000 102,000 S114,000 Aranol $4.00 per gallon 3,000 gallons 17,000 20,000 gallons 16,000 gallons Lendyl Total 6.00 Yield During March, the following actual production information was provided: Direct Material Actual Mix 60,000 gallons 140,000 Aranol Lendyl 200,000 gallons 166,000 gallons Total Yield Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.
Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob- lems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost S 12,000 102,000 S114,000 Aranol $4.00 per gallon 3,000 gallons 17,000 20,000 gallons 16,000 gallons Lendyl Total 6.00 Yield During March, the following actual production information was provided: Direct Material Actual Mix 60,000 gallons 140,000 Aranol Lendyl 200,000 gallons 166,000 gallons Total Yield Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 29P: Pharmaco Corporation buys three chemicals that are processed to produce two popular ingredients for...
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