Problem 7-66 (Algorithmic)

Appendix

Haddas Ltd. makes Healthy Life, a nutritional aid. For a 50-pound batch, standard material and labor costs are as follows:

Quantity	Unit Price	Total
Wheat	23.0 pounds	$ 0.18 per pound	$4.14
Barley	27.0 pounds	0.10 per pound	2.70
Corn	10 pounds	0.04 per pound	0.40
Skilled labor	0.8 hour	14.00 per hour	11.20
Unskilled labor	0.2 hour	8.00 per hour	1.60

During June, the following materials and labor were used in producing 600 batches of Healthy Life:

Wheat	17,400 pounds @ $0.21 per pound
Barley	15,500 pounds @ $0.11 per pound
Corn	10,000 pounds @ $0.06 per pound
Skilled labor	410 hours @ $14.20 per hour
Unskilled labor	250 hours @ $9.00 per hour

a. Calculate the material quantity, mix, and yield variances. Round your answers to the nearest dollar

Material Mix Variance $______________ favorable

Material Yield Variance $______________ unfavorable

Material quantity variance $______________ unfavorable

b. Calculate the labor efficiency, mix, and yield variances

Labor Mix Variance $______________ favorable

Labor Yield Variance $______________ unfavorable

Labor Efficiency Variance $______________ unfavorable

a.) Material Mix Variance = (AM x AQ x SP) (SM x AQ x SP)

Material Yield Variance = (SM x AQ x SP) (SM x SQ x SP)

b.) Labor Rate Variance = (AM x AH x AR) (AM x AH x SR) Labor Mix Variance = (AM x AH x SR) (SM x AQH x SR) Labor Yield Variance = (SM x AH x SR) (SM x SH x SR)