Question: I need answers to #3 and #4
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. .94 or 94% correct
2. Calculate the standard cost per unit of the
yield. If required, round your answer to the nearest cent.
$433.85 per unit of the yield
correct
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 -
3. Answer -
Direct materials yield variance = (Actual yield - Standard yield) * Standard cost per unit
Direct materials yield variance = (680 - 564) * 407.82
Direct materials yield variance = $47307 Favorable
4. Answer -
Direct materials mix variance = (Actual mix quantity - Standard mix quantity) * Standard cost per unit
Direct materials mix variance = (800 - 600) * 407.82
Direct materials mix variance = $81564 Favorable
Note - Standard cost per unit = Standard cost / Standard quantity
= 244692 / 600
= 407.82
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