BelChely product is made by mixing and processing two chemicals, belly and chilly. The standard cost data
Question:
BelChely product is made by mixing and processing two chemicals, belly and chilly. The standard cost data are as follows: -
Chemical Standard proportions Standard cost Sh.
Per unit Belly 60% 500
Chelly 40% 750
A standard process loss of 20% is anticipated; During a given week the output of this product was 4,250 units and the inputs were as follows: -
Chemical Actual consumption Actual price Actual cost
Belly 3,250 120 390,000
Chelly 1,750 140 245,000
Required
Calculate the following variances;
(i) Material price variance
(ii) Material mix variance
(iii) Material yield variance