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 Standard Mix Standard Unit Price Standard Cost Aranol 2,000 gallons $3.00 per gallon $ 6,000 Lendyl 18,000 5.00 90,000 Total 20,000 gallons $ 96,000 Yield 16,000 gallons During March, the following actual production information was provided: Direct Material Actual Mix Aranol 42,000 gallons Lendyl 158,000 Total 200,000 gallons Yield 166,000 gallons 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. Mix variance $fill in the blank 1 Yield variance $fill in the blank 3 2. Compute the total direct materials usage variance for Aranol and Lendyl. $fill in the blank 5
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.
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 | Standard Mix | Standard Unit Price | ||||
| Aranol | 2,000 | gallons | $3.00 | per gallon | $ | 6,000 |
| Lendyl | 18,000 | 5.00 | 90,000 | |||
| Total | 20,000 | gallons | $ | 96,000 | ||
| Yield | 16,000 | gallons |
During March, the following actual production information was provided:
| Direct Material | Actual Mix | |
| Aranol | 42,000 | gallons |
| Lendyl | 158,000 | |
| Total | 200,000 | gallons |
| Yield | 166,000 | gallons |
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.
| Mix variance | $fill in the blank 1 | |
| Yield variance | $fill in the blank 3 |
2. Compute the total direct materials usage variance for Aranol and Lendyl.
$fill in the blank 5
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