Question

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	570	gallons	0.95	$5.6	$3192.00
Aromatic compounds	30		0.05	8050.00	241500.00
Total	600	gallons			$244,692
Yield	564	gallons

On May 2, Chypre produced a batch of 800 gallons with the following actual results:

Direct Material	Actual Mix
Solvent mix	756.8	gallons
Aromatic compounds	43.2
Total	800	gallons
Yield	680	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.
$ Favorable or unfavorable

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

Answer 1

1. Yield Ratio=Standard Yield/ Actual Yield

=564/600=94%

2. Standard Cost= Total Cost/ Standard Yield

$244692/564=$433.85

3. Material Yield Variance=( Std yield Qty- Actual yield Qty)X Std Cost per Unit

(760 - 680)X $433.85=$34708

Std Qty= 800 Gallon X 0.95

=$760

4. Material Mix Variance

= ( Actual Qty- Std Qty)X SP

Solvenet:=(756.80-800)X $5.60=-$241.92

AC:- (43.20-40)X 8050=$25760

Total Direct Material Mix Variance= $25518.08