Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a single batch of 100 liters of its biggest selling product is as follows. Input Chemical Chem-A Chem-B Chem-C Quantity (in liters) 23 63 39 125 Input Chemical Chem-A Chem-B Chem-C Cost (per liter) $15 15 18 Quantity (in liters) 19,360 48,900 35,540 103,800 Total Cost There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 13-liter containers for sale. Thus, the standard material cost for a 13-liter container is $258.96 [= ($1,992 ÷ 100 liters) x 13 liters per container]. 345 945 702 $1,992 The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials are purchased and used at the same time). Total Cost $ 284,248 732,320 988,220 $2,004,788 $ A total of 8,300 containers (107,900 liters) were produced during September. Required: Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total variance into: a. & b. Materials price and efficiency variances and materials mix and yield variances. (Do not round intermediate calculations. Round "Standard mix values" to 3 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Enter your answers rounded to the nearest whole number.)
Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a single batch of 100 liters of its biggest selling product is as follows. Input Chemical Chem-A Chem-B Chem-C Quantity (in liters) 23 63 39 125 Input Chemical Chem-A Chem-B Chem-C Cost (per liter) $15 15 18 Quantity (in liters) 19,360 48,900 35,540 103,800 Total Cost There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 13-liter containers for sale. Thus, the standard material cost for a 13-liter container is $258.96 [= ($1,992 ÷ 100 liters) x 13 liters per container]. 345 945 702 $1,992 The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials are purchased and used at the same time). Total Cost $ 284,248 732,320 988,220 $2,004,788 $ A total of 8,300 containers (107,900 liters) were produced during September. Required: Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total variance into: a. & b. Materials price and efficiency variances and materials mix and yield variances. (Do not round intermediate calculations. Round "Standard mix values" to 3 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Enter your answers rounded to the nearest whole number.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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rr.14.
![Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a
single batch of 100 liters of its biggest selling product is as follows.
Input
Chemical
Chem-A
Chem-B
Chem-C
Quantity
(in liters)
23
63
39
125
Input
Chemical
Chem-A
Chem-B
Chem-C
Cost
(per liter)
$15
15
18
There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 13-liter
containers for sale. Thus, the standard material cost for a 13-liter container is $258.96 [= ($1,992 ÷ 100 liters) x 13 liters per container].
Quantity
(in liters)
19,360
48,900
35,540
103,800
The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials
are purchased and used at the same time).
Chem-A
Chem-B
Chem-C
Total
Input Chemical
Total
Cost
Total Cost
$ 284,248
732,320
988,220
$2,004,788
345
945
702
$1,992
$
A total of 8,300 containers (107,900 liters) were produced during September.
Required:
Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total
variance into:
a. & b. Materials price and efficiency variances and materials mix and yield variances. (Do not round intermediate calculations. Round
"Standard mix values" to 3 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for
unfavorable. If there is no effect, do not select either option. Enter your answers rounded to the nearest whole number.)
Mix Variance
Direct Material
Yield Variance
Efficiency Variance Purchase Price Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcbc0d840-f234-4645-8be3-231144922774%2F31a134aa-6bb1-4d62-95e1-b39301db8edc%2Fg4oycrr_processed.png&w=3840&q=75)
Transcribed Image Text:Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a
single batch of 100 liters of its biggest selling product is as follows.
Input
Chemical
Chem-A
Chem-B
Chem-C
Quantity
(in liters)
23
63
39
125
Input
Chemical
Chem-A
Chem-B
Chem-C
Cost
(per liter)
$15
15
18
There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 13-liter
containers for sale. Thus, the standard material cost for a 13-liter container is $258.96 [= ($1,992 ÷ 100 liters) x 13 liters per container].
Quantity
(in liters)
19,360
48,900
35,540
103,800
The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials
are purchased and used at the same time).
Chem-A
Chem-B
Chem-C
Total
Input Chemical
Total
Cost
Total Cost
$ 284,248
732,320
988,220
$2,004,788
345
945
702
$1,992
$
A total of 8,300 containers (107,900 liters) were produced during September.
Required:
Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total
variance into:
a. & b. Materials price and efficiency variances and materials mix and yield variances. (Do not round intermediate calculations. Round
"Standard mix values" to 3 decimal places. Indicate the effect of each variance by selecting "F" for favorable, or "U" for
unfavorable. If there is no effect, do not select either option. Enter your answers rounded to the nearest whole number.)
Mix Variance
Direct Material
Yield Variance
Efficiency Variance Purchase Price Variance
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