Material Mix Variance

MA – L2- Q27 – Advanced Variance Analysis

Calculate material price, mix, and yield variances for Product Z at Tamale Industries using standard and actual cost data.

Question

Tamale Industries has the following standard cost for producing 1 unit of Product Z:

Material	Quantity	Price per kilo	Cost
Material M	5 kilos	GH¢8	GH¢40
Material N	3 kilos	GH¢12	GH¢36

Actual results showed that 9,600 kilos of materials were used during a particular period as follows:

Material	Quantity	Cost
Material M	6,700 kilos	GH¢51,400
Material N	2,900 kilos	GH¢39,500

During the period, 1,250 units of Product Z were produced.

Required:
(a) Calculate the following variances:

Direct materials price variance
Materials mix variance
Materials yield variance
(b) Summarize the standard materials cost, materials price variance, materials mix variance, materials yield variance, and actual materials cost.

Answer

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Tags: Cost Control, Material Mix Variance, Material Price Variance, Material Yield Variance, Standard Costing, Variance analysis
Level: Level 2

Topic: Advanced Variance Analysis

MA – L2 – Q23 – Advanced Variance Analysis

Calculate total materials cost variance for Tamale Chemicals and analyze into price, usage, yield, and mix components for GreenLube production.

Question

Tamale Chemicals, based in Tamale, has the following standard cost for producing 9 litres of GreenLube:

5 litres of Material X at GH₵0.70 per litre
5 litres of Material Y at GH₵0.92 per litre.

There are no inventories of materials, and all material price variances relate to materials used. Actual results showed that 100,000 litres of materials were used during a particular period as follows:

45,000 litres of Material X: cost GH₵36,000
55,000 litres of Material Y: cost GH₵53,350

During the period, 92,070 litres of GreenLube were produced.

Required:
Calculate the total materials cost variance and analyse it into its price, usage, yield, and mix components.

Answer

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Topic: Advanced Variance Analysis

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MA – L2- Q27 – Advanced Variance Analysis

Calculate material price, mix, and yield variances for Product Z at Tamale Industries using standard and actual cost data.

MA – L2 – Q23 – Advanced Variance Analysis

Calculate total materials cost variance for Tamale Chemicals and analyze into price, usage, yield, and mix components for GreenLube production.

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Tag (SQ): Material Mix Variance

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MA – L2- Q27 – Advanced Variance Analysis

Calculate material price, mix, and yield variances for Product Z at Tamale Industries using standard and actual cost data.

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MA – L2 – Q23 – Advanced Variance Analysis

Calculate total materials cost variance for Tamale Chemicals and analyze into price, usage, yield, and mix components for GreenLube production.

You're reporting an error for "MA – L2 – Q23 – Advanced Variance Analysis"

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