Stearn and Company makes a lubricating oll using two grades of petroleum (Alpha and Beta). Within...

Transcribed Image Text:

Stearn and Company makes a lubricating oll using two grades of petroleum (Alpha and Beta). Within certain limits, the two grades can substitute for one another, so the actual mix of Inputs often differs from the standard mix. Stearn holds no materials Inventories. The standard cost of a unit of output follows. Input Grade Alpha Beta Cost per unit of output Input Grade Alpha Beta Quantity Total Quantity 31,800 units 56,700 units Input Grade A total of 60,000 units were produced during February. The actual inputs purchased and used during February were as follows: Cost per Unit of Input $ 13.85 8.10 Alpha Beta Total 0.5 unit 1.0 unit Cost per Unit of Input $ 14 8 Required: Prepare a complete materials variance analysis showing the materials price variance, the materials efficiency variance, the materials mix varlance, and the materials yield variance. Mix Variance Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. $7 8 $ 15 Direct Material Yield Variance Efficiency Variance Purchase Price Variance Stearn and Company makes a lubricating oll using two grades of petroleum (Alpha and Beta). Within certain limits, the two grades can substitute for one another, so the actual mix of Inputs often differs from the standard mix. Stearn holds no materials Inventories. The standard cost of a unit of output follows. Input Grade Alpha Beta Cost per unit of output Input Grade Alpha Beta Quantity Total Quantity 31,800 units 56,700 units Input Grade A total of 60,000 units were produced during February. The actual inputs purchased and used during February were as follows: Cost per Unit of Input $ 13.85 8.10 Alpha Beta Total 0.5 unit 1.0 unit Cost per Unit of Input $ 14 8 Required: Prepare a complete materials variance analysis showing the materials price variance, the materials efficiency variance, the materials mix varlance, and the materials yield variance. Mix Variance Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. $7 8 $ 15 Direct Material Yield Variance Efficiency Variance Purchase Price Variance