15 McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of 100 gallons of its biggest selling product is as follows: Input Chemical X-1 X-2 X-3 Input Chemical X-1 X-2 X-3 Quantity (in gallons) 22.5 40 62.5 125 There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-gallon containers for sale. Thus, the standard material cost for a 10-gallon container is $462.50 [= ($4,625 ÷ 100 gallons) × 10 gallons per container]. The actual quantities of direct materials and the cost of the materials placed in production during March were as follows (materials are purchased and used at the same time): Input Chemical Cost (per gallon) $ 62 37 28 Quantity (in gallons) 12,500 19,700 30, 200 62,400 X-1 X-2 X-3 Total Total Cost $ 1,395 1,480 1,750 $ 4,625 Total Cost $ 717,800 764,700 898,000 $ 2,380,500 A total of 5,060 containers (50,600 gallons) were produced during March. Required: Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total variance into: Mix Variance a. and b. Materials price and efficiency variances and materials mix and yield variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Material Yield Variance Efficiency Variance Purchase Price Variance
15 McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of 100 gallons of its biggest selling product is as follows: Input Chemical X-1 X-2 X-3 Input Chemical X-1 X-2 X-3 Quantity (in gallons) 22.5 40 62.5 125 There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-gallon containers for sale. Thus, the standard material cost for a 10-gallon container is $462.50 [= ($4,625 ÷ 100 gallons) × 10 gallons per container]. The actual quantities of direct materials and the cost of the materials placed in production during March were as follows (materials are purchased and used at the same time): Input Chemical Cost (per gallon) $ 62 37 28 Quantity (in gallons) 12,500 19,700 30, 200 62,400 X-1 X-2 X-3 Total Total Cost $ 1,395 1,480 1,750 $ 4,625 Total Cost $ 717,800 764,700 898,000 $ 2,380,500 A total of 5,060 containers (50,600 gallons) were produced during March. Required: Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total variance into: Mix Variance a. and b. Materials price and efficiency variances and materials mix and yield variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Material Yield Variance Efficiency Variance Purchase Price Variance
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McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of
100 gallons of its biggest selling product is as follows:
Input Chemical
X-1
X-2
X-3
Input Chemical
X-1
X-2
X-3
Quantity (in
gallons)
22.5
40
62.5
125
There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-gallon
containers for sale. Thus, the standard material cost for a 10-gallon container is $462.50 [= ($4,625 ÷ 100 gallons) × 10 gallons per
container].
The actual quantities of direct materials and the cost of the materials placed in production during March were as follows (materials are
purchased and used at the same time):
Input Chemical
Cost (per
gallon)
$ 62
37
28
Quantity (in
gallons)
12,500
19,700
30, 200
62,400
X-1
X-2
X-3
Total
Total Cost
$ 1,395
1,480
1,750
$ 4,625
Total Cost
$ 717,800
764,700
898,000
$ 2,380,500
A total of 5,060 containers (50,600 gallons) were produced during March.
Required:
Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total variance
into:
Mix Variance
a. and b. Materials price and efficiency variances and materials mix and yield variances.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for
unfavorable. If there is no effect, do not select either option.
Direct Material
Yield Variance
Efficiency Variance
Purchase Price Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdead88a2-0ef7-48c9-8d78-426ba1780967%2Fea774dc7-c997-46fa-889b-5d8197559d8c%2F8dmvbab_processed.png&w=3840&q=75)
Transcribed Image Text:15
McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of
100 gallons of its biggest selling product is as follows:
Input Chemical
X-1
X-2
X-3
Input Chemical
X-1
X-2
X-3
Quantity (in
gallons)
22.5
40
62.5
125
There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-gallon
containers for sale. Thus, the standard material cost for a 10-gallon container is $462.50 [= ($4,625 ÷ 100 gallons) × 10 gallons per
container].
The actual quantities of direct materials and the cost of the materials placed in production during March were as follows (materials are
purchased and used at the same time):
Input Chemical
Cost (per
gallon)
$ 62
37
28
Quantity (in
gallons)
12,500
19,700
30, 200
62,400
X-1
X-2
X-3
Total
Total Cost
$ 1,395
1,480
1,750
$ 4,625
Total Cost
$ 717,800
764,700
898,000
$ 2,380,500
A total of 5,060 containers (50,600 gallons) were produced during March.
Required:
Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total variance
into:
Mix Variance
a. and b. Materials price and efficiency variances and materials mix and yield variances.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for
unfavorable. If there is no effect, do not select either option.
Direct Material
Yield Variance
Efficiency Variance
Purchase Price Variance
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