Casino Pest Control (CPC) provides services to residential households by an application of a special chemical mix that varies somewhat in proportion based on environmental factors. CPC mixes two chemicals, Red-10 and Blue-12, in proportions depending on the climate and the particular pest problems of the neighborhood. A standard mix calls for a tank of the mixture to combine 60 percent Red-10 and 40 percent Blue-12. That is, a quart of the standard mixture contains 0.6 quarts of Red-10 and 0.4 quarts of Blue-12. Red-10 has a standard cost of $7 per quart and Blue-12 has a standard cost of $17.50 per quart. Each quart can treat 100 square yards. CPC expected to treat 500,000 square yards in May. CPC actually treated 510,000 square yards in May. The company used 2,920 quarts of Red-10 and 2,120 quarts of Blue-12. The actual total cost of Red-10 purchased in May was $22,192 and $34,980 for the Blue-12. CPC does not hold any materials inventory. Required: a. Compute the materials price and efficiency variances for the season. b. Compute the materials mix and yield variances for the season.
Casino Pest Control (CPC) provides services to residential households by an application of a special chemical mix that varies somewhat in proportion based on environmental factors. CPC mixes two chemicals, Red-10 and Blue-12, in proportions depending on the climate and the particular pest problems of the neighborhood. A standard mix calls for a tank of the mixture to combine 60 percent Red-10 and 40 percent Blue-12. That is, a quart of the standard mixture contains 0.6 quarts of Red-10 and 0.4 quarts of Blue-12. Red-10 has a standard cost of $7 per quart and Blue-12 has a standard cost of $17.50 per quart. Each quart can treat 100 square yards. CPC expected to treat 500,000 square yards in May. CPC actually treated 510,000 square yards in May. The company used 2,920 quarts of Red-10 and 2,120 quarts of Blue-12. The actual total cost of Red-10 purchased in May was $22,192 and $34,980 for the Blue-12. CPC does not hold any materials inventory. Required: a. Compute the materials price and efficiency variances for the season. b. Compute the materials mix and yield variances for the season.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1
Transcribed Image Text:Casino Pest Control (CPC) provides services to residential households by an application of a special chemical mix that varies
somewhat in proportion based on environmental factors. CPC mixes two chemicals, Red-10 and Blue-12, in proportions depending on
the climate and the particular pest problems of the neighborhood. A standard mix calls for a tank of the mixture to combine 60 percent
Red-10 and 40 percent Blue-12. That is, a quart of the standard mixture contains 0.6 quarts of Red-10 and 0.4 quarts of Blue-12. Red-10
has a standard cost of $7 per quart and Blue-12 has a standard cost of $17.50 per quart. Each quart can treat 100 square yards. CPC
expected to treat 500,000 square yards in May.
CPC actually treated 510,000 square yards in May. The company used 2,920 quarts of Red-10 and 2,120 quarts of Blue-12. The actual
total cost of Red-10 purchased in May was $22,192 and $34,980 for the Blue-12. CPC does not hold any materials inventory.
Required:
a. Compute the materials price and efficiency variances for the season.
b. Compute the materials mix and yield variances for the season.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the materials price and efficiency variances for the season.
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.
Red-10
Blue-12
Total
$
$
$
Price Variance
1,752
2,120
368
Answer is complete but not entirely correct.
U
F
F
$
Efficiency Variance
20,083 F
36,208
F
16,125 F
< Required A
Required B >
Transcribed Image Text:Required:
a. Compute the materials price and efficiency variances for the season.
b. Compute the materials mix and yield variances for the season.
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the materials mix and yield variances for the season.
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.
Red-10
Blue-12
Total
Answer is complete but not entirely correct.
$
$
$
Mix Variance
728 F
1,820 U
1,092 U
$
$
$
Yield Variance
168 U
(280) ► U
448 U
< Required A
Required B
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