Iron Inc. manufactures fertilizers by mixing two chemicals, A and B. The standard cost information for 1 bag of fertilizer is given as follows: Material A 3lb. @ $7 per pound Material B 7lb. @ $5 per pound For 2012, the firm produced 1,890 bags of fertilizer. It used 7,000 pounds of material A and 13,000 pounds of material B. The actual price of both A and B was $4.50 per pound. Required: What is the materials yield. variance for 2012? Unfavorable numbers should not be negative. Hint: the materials mix variance is not the answer.
Iron Inc. manufactures fertilizers by mixing two chemicals, A and B. The standard cost information for 1 bag of fertilizer is given as follows: Material A 3lb. @ $7 per pound Material B 7lb. @ $5 per pound For 2012, the firm produced 1,890 bags of fertilizer. It used 7,000 pounds of material A and 13,000 pounds of material B. The actual price of both A and B was $4.50 per pound. Required: What is the materials yield. variance for 2012? Unfavorable numbers should not be negative. Hint: the materials mix variance is not the answer.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Iron Inc. manufactures fertilizers by mixing
two chemicals, A and B. The standard cost
information for 1 bag of fertilizer is given as
follows: Material A 3lb. @ $7 per pound
Material B 7lb. @ $5 per pound For 2012,
the firm produced 1,890 bags of fertilizer. It
used 7,000 pounds of material A and
13,000 pounds of material B. The actual
price of both A and B was $4.50 per pound.
Required: What is the materials yield
variance for 2012? Unfavorable numbers
should not be negative.
Hint: the materials mix variance is not the
answer.
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