Diva Dog Treat Ltd. manufactures a vegetarian chew biscuit for puppies. The dog biscuit uses a multigrain formula that sometimes varies depending on supplier cost and availability. The company produces a standard lot of 50,000 kilograms of biscuits. The standard for each batch is as follows: Whole wheat Quinoa Spelt Cost per kg $1.20 $2.50 $3.50 Whole wheat Quinoa Spelt In May, Diva produced 50,000 kilograms of biscuits. The actual use of grain for the month was as follows: Kg used kgs used 27,500 16,000 6,500 30,000 15,000 5,000 Cost per kg $1.25 $2.40 $3.25 In June, Diva produced a 51,500 kg batch of biscuits. The actual use of grain for the month was as follows: (Actual costs in June were back to standard) Whole wheat 31,000 Quinoa 16,000 Spelt 5,000 Required a) What is the total mix variance for May and for June? b) What is the total vield variance for May and for June?
Diva Dog Treat Ltd. manufactures a vegetarian chew biscuit for puppies. The dog biscuit uses a multigrain formula that sometimes varies depending on supplier cost and availability. The company produces a standard lot of 50,000 kilograms of biscuits. The standard for each batch is as follows: Whole wheat Quinoa Spelt Cost per kg $1.20 $2.50 $3.50 Whole wheat Quinoa Spelt In May, Diva produced 50,000 kilograms of biscuits. The actual use of grain for the month was as follows: Kg used kgs used 27,500 16,000 6,500 30,000 15,000 5,000 Cost per kg $1.25 $2.40 $3.25 In June, Diva produced a 51,500 kg batch of biscuits. The actual use of grain for the month was as follows: (Actual costs in June were back to standard) Whole wheat 31,000 Quinoa 16,000 Spelt 5,000 Required a) What is the total mix variance for May and for June? b) What is the total vield variance for May and for June?
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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:Diva Dog Treat Ltd. manufactures a vegetarian chew biscuit for puppies. The dog biscuit uses a
multigrain formula that sometimes varies depending on supplier cost and availability. The
company produces a standard lot of 50,000 kilograms of biscuits. The standard for each batch is
as follows:
Whole wheat
Quinoa
Spelt
Whole wheat
Quinoa
Spelt
Cost per kg
$1.20
$2.50
$3.50
In May, Diva produced 50,000 kilograms of biscuits. The actual use of grain for the month was
as follows:
Whole wheat
Quinoa
Spelt
Kg used
27,500
16,000
6,500
kgs used
16,000
5,000
30,000
15,000
5,000
In June, Diva produced a 51,500 kg batch of biscuits. The actual use of grain for the month was
as follows: (Actual costs in June were back to standard)
31,000
Cost per kg
$1.25
$2.40
$3.25
Required
a) What is the total mix variance for May and for June?
b) What is the total yield variance for May and for June?
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