Question

1. Direct Materials Mix and Yield Variances

   Chypre, Inc., produces a cologne mist using a solvent mix (water and pure alcohol) and aromatic compounds (the scent base) that it sells to other companies for bottling and sale to consumers. Chypre developed the following standard cost sheet:

   Direct Material	Mix		Mix Proportion	SP	Standard Cost
   Solvent mix	855	gallons	0.95	$5.55	$4745.25
   Aromatic compounds	45		0.05	8040.00	361800.00
   Total	900	gallons			$366,545.25
   Yield	837	gallons

   On May 2, Chypre produced a batch of 1,200 gallons with the following actual results:

   Direct Material	Actual Mix
   Solvent mix	1,135.2	gallons
   Aromatic compounds	64.8
   Total	1,200	gallons
   Yield	1,080	gallons

   Required:

   Instructions for parts 3 and 4: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

   1. Calculate the yield ratio. If required, round your answer to two decimal places.

   2. Calculate the standard cost per unit of the yield. If required, round your answer to the nearest cent.
   $ per unit of the yield

   3. Calculate the direct materials yield variance. If required, round your answer to the nearest cent.
   $   

   4. Calculate the direct materials mix variance. If required, round your answer to the nearest cent.
   $   

Check My Work

Answer 1

Answer:

1.) Yield ratio = Standard yield / Actual Yield = 855/900 = 0.95

2.) Standard cost per unit yield = Standard cost / Standard yield = $366545.25/837 = $437.93

3.)
Material yield variance = (Standard - Actual)*Standard cost per unit
Standard yield = 1200*0.95 = 1140
Material yield variance = (1140 -1080)*$437.93 = $26,275.8

4.)

	A	B	C=A-B	D	E=CxD
	Actual quantity	Standard	Difference	Selling price
Solvent	1135.2	1140	-4.8	$5.55	$-26.64
Aromatic compound	64.8	60	4.8	$8040	$38,592
		Direct material mix variance			$38,565.36 (U)