Stacy, Inc., produces a product using a process that allows for substitution between two materials, Alpha and Beta. The company has the following direct materials data for its product:
Standard costs for one unit of output
Alpha . . . . . . . . . . . . . . . . . . . . . . 40 units of input at $5.00
Beta . . . . . . . . . . . . . . . . . . . . . . . 80 units of input at $7.50
The company had the following results in June:
Units of output produced 2,000 units
Materials purchased and used
Alpha . . . . . . . . . . . . . . . . . . . . . 88,000 units at $4.50
Beta . . . . . . . . . . . . . . . . . . . . . . 152,000 units at $8.00
Required
a. Compute materials price and efficiency variances.
b. Compute materials mix and yield variances.