An edible product has three ingredients, which are mixed according to the standard cost card as follows: Material £ E 8 kg at £3 per kg 24 F 2 kg at £10 per kg 20 G 5 kg at £6 per kg 30 In August, 4,000 units were produced and the following amounts of material were used: Material kg E 31,000 F 9,000 G 23,000 What were the material mix and yield variances for August?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
An edible product has three ingredients, which are mixed according to the
|
Material |
|
£ |
|
E |
8 kg at £3 per kg |
24 |
|
F |
2 kg at £10 per kg |
20 |
|
G |
5 kg at £6 per kg |
30 |
In August, 4,000 units were produced and the following amounts of material were used:
|
Material |
kg |
|
E |
31,000 |
|
F |
9,000 |
|
G |
23,000 |
What were the material mix and yield variances for August?
Step by step
Solved in 2 steps
