Direct Materials Usage Variance, Direct Materials Mix and Yield Variances Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. 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 Aranol Lendyl Total Aranol Lendyl Total Yield Standard Unit Standard Mix 3,000 gallons $4.00 per gallon $ 17,000 6.00 20,000 gallons 16,000 gallons Yield During March, the following actual production information was provided: 1 Direct Material Mix variance Yield variance Price Standard Cost Actual Mix 60,000 gallons 140,000 200,000 gallons 166,000 gallons 72,000 X 20,685 X 12,000 102,000 $ $114,000 Required: 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. Favorable ✔ Favorable ✔ 1 2. Compute the total direct materials usage variance for Aranol and Lendyl. 21,750 X Favorable ✔
Direct Materials Usage Variance, Direct Materials Mix and Yield Variances Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. 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 Aranol Lendyl Total Aranol Lendyl Total Yield Standard Unit Standard Mix 3,000 gallons $4.00 per gallon $ 17,000 6.00 20,000 gallons 16,000 gallons Yield During March, the following actual production information was provided: 1 Direct Material Mix variance Yield variance Price Standard Cost Actual Mix 60,000 gallons 140,000 200,000 gallons 166,000 gallons 72,000 X 20,685 X 12,000 102,000 $ $114,000 Required: 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. Favorable ✔ Favorable ✔ 1 2. Compute the total direct materials usage variance for Aranol and Lendyl. 21,750 X Favorable ✔
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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.
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Transcribed Image Text:Direct Materials Usage Variance, Direct Materials Mix and Yield Variances
Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. 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
Aranol
Lendyl
Total
Aranol
Lendyl
Total
Standard Unit
20,000 gallons
16,000 gallons
Mix variance
Standard Mix
3,000 gallons $4.00 per gallon $
17,000
6.00
Yield variance
Yield
During March, the following actual production information was provided:
1
Direct Material
Price
Standard
Cost
Actual Mix
60,000 gallons
140,000
200,000 gallons
166,000 gallons
Yield
Required:
1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent
computations.
72,000 X
20,685 X
12,000
102,000
$ $114,000
1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent
computations.
Favorable ✔
Favorable ✔
1
2. Compute the total direct materials usage variance for Aranol and Lendyl.
21,750 X Favorable ✔
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