Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob- lems. 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 S 12,000 102,000 S114,000 Aranol $4.00 per gallon 3,000 gallons 17,000 20,000 gallons 16,000 gallons Lendyl Total 6.00 Yield During March, the following actual production information was provided: Direct Material Actual Mix 60,000 gallons 140,000 Aranol Lendyl 200,000 gallons 166,000 gallons Total Yield Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.

Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob- lems. 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 S 12,000 102,000 S114,000 Aranol $4.00 per gallon 3,000 gallons 17,000 20,000 gallons 16,000 gallons Lendyl Total 6.00 Yield During March, the following actual production information was provided: Direct Material Actual Mix 60,000 gallons 140,000 Aranol Lendyl 200,000 gallons 166,000 gallons Total Yield Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 34P: Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems....

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Question

Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob-
lems. 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
S 12,000
102,000
S114,000
Aranol
$4.00 per gallon
3,000 gallons
17,000
20,000 gallons
16,000 gallons
Lendyl
Total
6.00
Yield
During March, the following actual production information was provided:
Direct Material
Actual Mix
60,000 gallons
140,000
Aranol
Lendyl
200,000 gallons
166,000 gallons
Total
Yield
Required:
1. Compute the direct materials mix and yield variances.
2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total
direct materials usage variance is equal to the sum of the direct materials mix and yield variances.

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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 3,000 gallons $4.00 per gallon $ 12,000 Lendyl 17,000 6.00 102,000 Total 20,000 gallons $114,000 Yield 16,000 gallons During March, the following actual production information was provided: Direct Material Actual Mix Aranol 60,000 gallons Lendyl 140,000 Total 200,000 gallons Yield 166,000 gallons Vet-Pro, Inc., also uses two different types of direct labor in producing the anti-anxiety mixture: mixing and drum-filling labor (the completed product is placed into 50-gallon drums). For each batch of 20,000 gallons of direct materials input, the…
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 2,400 gallons $5.00 per gallon Lendyl 17,600 7.00 Total 20,000 gallons Yield 16,000 gallons Standard Cost $12,000 123,200 $135,200 During March, the following actual production information was provided: Direct Material Aranol Lendyl Total Actual Mix 52,000 gallons 148,000 200,000 gallons 166,000 gallons Yield 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 Yield variance x Favorable Favorable 2. Compute the total direct materials usage variance for Aranol and…
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Chypre, Ic., produces a cologne mist using a solvent mix (water and pure alcohol) and aro- matic compounds (the scent base) that it sells to other companies for bottling and sale to con- sumers. Chypre developed the following standard cost sheet: Direct Material Mix Proportion SP Mix Standard Cost Solvent mix 760 gallons 0.95 5.27 S 4,005.20 Aromatic compounds Total 40 0.05 8,000.00 320,000.00 800 gallons 720 gallons S324,005.20 Yield On May 2, Chypre produced a batch of 1,000 gallons with the following actual results: Direct Material Actual Mix Solvent mix 945 gallons Aromatic compounds 55 1,000 gallons 880 gallons Total Yield Required: 1. Calculate the yield ratio. 2. Caleulate the standard cost per unit of the yield. (Round to the nearest cent.) 3. Calculate the direct materials yield variance. (Round to the nearest cent.) 4. Calculate the direct materials mix variance. (Round to the nearest cent.)
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