Plano Products manufactures a wide variety of chemical compounds and

Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a single batch of 100 liters of its biggest selling product is as follows:
Plano Products manufactures a wide variety of chemical compounds and

There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-liter containers for sale. Thus, the standard material cost for a 10-liter container is $198 [= ($1,980 ÷ 100 liters) × 10 liters per container].
The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials are purchased and used at the same time):

Plano Products manufactures a wide variety of chemical compounds and

A total of 8,000 containers (80,000 liters) were produced during September.
Required
Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total variance into:
a. Materials price and efficiency variances.
b. Materials mix and yield variances.



Transcribed Image Text:

Input Chemical Quantity Cost Total (in lilters) (per liter) Cost $9 180 720 241,000 $1,980 12 125 Input Chemical Quantity (n Iiters) Total Cost Chem-c50,400 37,040 607,320 898,220