Houston Corporation manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix
Question:
Houston Corporation manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a single batch of 1,000 liters of Rust-Off is as follows:
There is a 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 5-liter bottles for sale. Thus, the standard material cost for a 5-liter bottle is $78.
The actual quantities of direct materials and the cost of the materials placed in production during
March were as follows (materials are purchased and used at the same time):
A total of 16,000 bottles (80,000 liters) were produced during March.
Required
Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total variance into:
a. Materials price and efficiency variances.
b. Materials mix and yieldvariances.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher