Gumbo Inc. is a manufacturer of chewing gum that uses a standard cost system. Standard product and cost information to produce 1000 Kg of chewing gum follow Quantity Kg $ Price / Kg Gum base 800 0.25 Corn syrup 200 0.40 Sugar 200 0.10 Material records indicate for the Month of May: Material Beginning Inventory Kg Gum base 10,000 Corn Syrup 12,000 Sugar 15,000 The actually finished production for May is 200,000 kg. Required: Determine the: a. Materials price variance b. Materials usage variance c. Materials mix variance d. Materials yield variance Purchases Kg 162,000 @$0.24 30,000 @$0.42 32,000 @$0.11 Ending Inventory Kg 15,000 4,000 11,000
Gumbo Inc. is a manufacturer of chewing gum that uses a standard cost system. Standard product and cost information to produce 1000 Kg of chewing gum follow Quantity Kg $ Price / Kg Gum base 800 0.25 Corn syrup 200 0.40 Sugar 200 0.10 Material records indicate for the Month of May: Material Beginning Inventory Kg Gum base 10,000 Corn Syrup 12,000 Sugar 15,000 The actually finished production for May is 200,000 kg. Required: Determine the: a. Materials price variance b. Materials usage variance c. Materials mix variance d. Materials yield variance Purchases Kg 162,000 @$0.24 30,000 @$0.42 32,000 @$0.11 Ending Inventory Kg 15,000 4,000 11,000
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Transcribed Image Text:Gumbo Inc. is a manufacturer of chewing gum that uses a standard cost system. Standard product and cost information to produce 1000 Kg of chewing gum follows:
Quantity Kg
$ Price / Kg
800
0.25
Gum base
Corn syrup
200
0.40
Sugar
200
0.10
Material records indicate for the Month of May:
Material
Beginning Inventory Kg
Gum base
10,000
Corn Syrup
12,000
Sugar
15,000
The actually finished production for May is 200,000 kg.
Required:
Determine the:
Purchases Kg
162,000 @$0.24
a. Materials price variance
b. Materials usage variance
c. Materials mix variance
d. Materials yield variance.
30,000 @$0.42
32,000 @$0.11
Ending Inventory Kg
15,000
4,000
11,000
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Step 1: Define standard cost accounting
VIEWStep 2: Calculation of Standard quantity
VIEWStep 3: a) Determining the material price variance
VIEWStep 4: b) Determining the Material usage variance
VIEWStep 5: c) Determining the materials mix variance
VIEWStep 6: d) Determining the material yield variance
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