A company is manufacturing a chemical product making use of four different types of raw materials as follows : Raw material Share of total input (%) Cost of raw material ($/kg) A 40 50 B 30 80 C 20 90 D 10 100 There is an inevitable normal loss of 10% during the processing. For April 2019, the management furnished the following information : Raw material Quantity consumed (kgs.) Cost of raw material ($/kg) 42,000 31,000 18,000 9,000 A 48 B 80 C 92 110 Output obtained for the month was 92,000 kgs. Calculate : (a) Material cost variance, (b) Material price variance, (c) Material mix variance.
A company is manufacturing a chemical product making use of four different types of raw materials as follows : Raw material Share of total input (%) Cost of raw material ($/kg) A 40 50 B 30 80 C 20 90 D 10 100 There is an inevitable normal loss of 10% during the processing. For April 2019, the management furnished the following information : Raw material Quantity consumed (kgs.) Cost of raw material ($/kg) 42,000 31,000 18,000 9,000 A 48 B 80 C 92 110 Output obtained for the month was 92,000 kgs. Calculate : (a) Material cost variance, (b) Material price variance, (c) Material mix variance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company is manufacturing a chemical product making use of
four different types of raw materials as follows :
Raw material
Share of total input (%)
Cost of raw material ($/kg)
A
40
50
B
30
80
20
90
D
10
100
There is an inevitable normal loss of 10% during the processing.
For April 2019, the management furnished the following information :
Raw material
Quantity consumed (kgs.)
Cost of raw material ($/kg)
42,000
31,000
18,000
9,000
48
80
92
110
Output obtained for the month was 92,000 kgs.
Calculate : (a) Material cost variance, (b) Material price variance, (c) Material mix variance.
ABCD
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