Question: Roasters Limited is a coffee-blending firm. It produces a special blend of coffee known as Utopia Blend by mixing two grades of coffee AB

Roasters Limited is a coffee-blending firm. It produces a special blend of coffee known as "Utopia Blend" by mixing two grades of coffee "AB" and "QP" as follows: Material AB QP Standard mix ratio AB QP 40% 60% A standard loss of 15% is expected. During the month of March 2002, the company produced 2,500 kg of "Utopia Blend". The actual quantities blended were as follows: Standard price per Kg Sh 120 Sh 100 Quantity used 1,400kg 1,600kg Cost (Sh) 175,000 152,000 Required: Calculate the following variances i) ii) iii) iv) v) Material price variance Material usage variance Material min variance Material yield variance Material cost variance (2 marks) (2 marks) (4 marks) (4 marks) (3 marks)

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