- This topic has 3 replies, 2 voices, and was last updated 10 years ago by
.
- Posts
A mix of 3 material into a process produces 1 litre of finished product ,with some loss of ouput in the process .Standard material cost are as follows per litre of output.
Material $
X 0.3 litre @$2 per litre 0.60
Y 0.6 litre @$3 per litre 1.80
Z 0. 3 litre @$1 per litre 0.30
2.70
During a control period ,5000 units of ouput were produced .These used 1400 litres of material X ,3100 litres of material Y and 1250 litres of material Z;
What is the material yield variance ?
A $412.50 (A)
B $150 (F)
C $469 (F)
D $562.50(F)Please do not simply set a question and require an answer!
Presumably you have an answer in whichever book you found the question, and so please say which part of the answer you are having problems with and then I will try and help.Have you watched the free lectures on mix and yield variances???
For the output of 5,000 litres, we would have expected the total input to be 5,000 x 1.2 – 6,000 litres. The actual total input was 5,750. Therefore there is a yield variance of 250 litres, which is costed at standard cost per litre of input of $2.25. So the total variance is 250 x 2.25 = 562.50 (F)
(Alternatively, if you prefer, for actual input of 5,750 litres we would have expected the output to be 1/1.2 x 5750 = 4791.6667. The actual output is 5,000 which is higher by 208.3333. Cost this at standard cost per litre of output of 2.70, and the yield variance is 208.3333 x 2.70 = 562.50 (F) )
- You must be logged in to reply to this topic.