Question

San Francisco Corporation uses two materials in the production of its product. The materials, X and...

San Francisco Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards:

Material Standard Mix Standard Unit Price Standard Cost
X 3,500 units $1.00 per unit $3,500
Y 1,500 units 3.00 per unit $4,500
Yield 4,000 units


During April, the following actual production information was provided:

Material Actual Mix
X 30,000 units
Y 20,000 units
Yield 36,000 units


What is the materials usage variance?

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Answer #1
Material Usage Variance
(Standard Mix for actual Yield- Acutal Mix)* Standard unit price
Material Usage variance of X
(Standard Mix for actual Yield 31500
(3500/4000)*36000
(Standard Mix for actual Yield- Acutal Mix)* Standard unit price
(31500-30000)*$1 1500 (Favourable)
Material Usage variance of Y
(Standard Mix for actual Yield 13500
(1500/4000)*36000
(Standard Mix for actual Yield- Acutal Mix)* Standard unit price
(13500-20000)*$3 -19500 (Adverse)
Total -18000 (Adverse)
(1500-19500)
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