Regis Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards:

Material Standard Mix Standard Unit Price Standard Cost
X 3,500 units $1.00 per unit $3,500
Y 1,500 units  3.00 per unit $4,500
       
Yield 4,000 units    

During April, the following actual production information was provided:

Material Actual Mix
X 30,000 units
Y 20,000 units
   
Yield 36,000 units

What is the materials usage variance?

a. $10,000 (U)
b. $ 8,000 (U)
c. $ 8,000 (F)
d. $18,000 (U)

ANS:  D

SUPPORTING CALCULATIONS:

MUV = Mix variance + Yield variance
  = $10,000 (U) + $8,000 (U) = $18,000 (U)

Mix Variance

SM(X) = 3,500/5,000 ´ (30,000 +20,000) = 35,000

SM(Y) = 1,500/5,000 ´ (30,000 + 20,000) = 15,000

Material AQ SM AQ – SM SP (AQ – SM)SP
X 30,000 35,000 (5,000) $1.00   $(5,000)
Y 20,000 15,000 5,000  3.00    15,000 
            $10,000 (U)

 Yield Variance

STANDARD YIELD = (4,000/5,000) ´ 50,000 = 40,000

(40,000 – 36,000) ´ ($8,000/4,000) = $8,000 (U)

Regis Corporation uses two types of labor in the production of its product. Mixing and bottling have the following standards:

Labor Type Standard Mix Standard Unit Price Standard Cost
Mixing 500 hours $10.00 per hour   $5,000
Bottling 250 hours 5.00 per hour   $1,250
       
Yield 4,000 units    

During April, the following actual production information was provided:

Labor Type Actual Mix
Mixing 4,500 hours
Bottling 3,000 hours
   
Yield 36,000 units

What is the labor efficiency variance?

a. $2,500 (F)
b. $6,250 (U)
c. $3,750 (F)
d. $3,750 (U)

ANS:  D

SUPPORTING CALCULATIONS:

LEV = Mix variance + Yield variance
  = $2,500 (F) + $6,250 (U) = $3,750 (U)

Labor mix variance

SM(mixing) = (500/750) ´ (4,500 + 3,000) = 5,000

SM (Bottling) = (250/750) ´ (4,500 + 3,000) = 2,500

Labor Type AQ SM AQ – SM SP (AQ – SM)SP
Mixing 4,500 5,000 (500) $10.00   $(5,000)
Bottling 3,000 2,500 500   5.00     2,500
            $ 2,500 (F)

Labor yield variance:

Standard Yield = (4000/750) ´ 7500 = 40,000

(40,000 – 36,000) ´ ($6,250/4,000) = $6,250 (U)

PTS:   1                    OBJ:   9-5

Regis Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards:

Material Standard Mix Standard Unit Price Standard Cost
X 3,500 units $1.00 per unit $3,500
Y 1,500 units  3.00 per unit $4,500
       
Yield 4,000 units    

During April, the following actual production information was provided:

Material Actual Mix
X 30,000 units
Y 20,000 units
   
Yield 36,000 units

What is the materials mix variance?

a. $5,000 (F)
b. $10,000 (U)
c. $10,000 (F)
d. $15,000 (F)

ANS:  B

SUPPORTING CALCULATIONS:

SM(X) = 3,500/5,000 ´ (30,000 +20,000) = 35,000

SM(Y) = 1,500/5,000 ´ (30,000 + 20,000) = 15,000

Material AQ SM AQ – SM SP (AQ – SM)SP
X 30,000 35,000 (5,000) $1.00  $(5,000)
Y 20,000 15,000 5,000  3.00   15,000
           $10,000 (U)

 Regis Corporation uses two materials in the production of its product. The materials, X and Y, have the following standards:

Material Standard Mix Standard Unit Price Standard Cost
X 3,500 units $1.00 per unit $3,500
Y 1,500 units  3.00 per unit $4,500
       
Yield 4,000 units    

During April, the following actual production information was provided:

Material Actual Mix
X 30,000 units
Y 20,000 units
   
Yield 36,000 units

What is the materials yield variance?

a. $4,000 (F)
b. $8,000 (F)
c. $8,000 (U)
d. $9,000 (U)

ANS:  C

SUPPORTING CALCULATIONS:

STANDARD YIELD = (4,000/5,000) ´ 50,000 = 40,000

(40,000 – 36,000) ´ ($8,000/4,000) = $8,000 (U)

PTS:   1                    OBJ:   9-5

Regis Corporation uses two types of labor in the production of its product. Mixing and bottling have the following standards:

Labor Type Standard Mix Standard Unit Price Standard Cost
Mixing 500 hours $10.00 per hour $5,000
Bottling 250 hours   5.00 per hour $1,250
       
Yield 4,000 units    

During April, the following actual production information was provided:

Labor Type Actual Mix
Mixing 4,500 hours
Bottling 3,000 hours
   
Yield 36,000 units

What is the labor mix variance?

a. $2,500 (F)
b. $5,000 (U)
c. $5,000 (F)
d. $2,500 (U)

ANS:  A

SUPPORTING CALCULATIONS:

SM(Mixing) = (500/750) ´ (4,500 + 3,000) = 5,000

SM (Bottling) = (250/750) ´ (4,500 + 3,000) = 2,500

Labor Type AQ SM AQ – SM SP (AQ – SM)SP
Mixing 4,500 5,000 (500) $10.00  $(5,000)
Bottling 3,000 2,500 500   5.00    2,500
           $ 2,500 (F)

What is the labor yield variance?

a. $6,250 (F)
b. $4,000 (F)
c. $6,250 (U)
d. $4,000 (U)

ANS:  C

SUPPORTING CALCULATIONS:

Standard Yield = (4,000/750) ´ 7,500 = 40,000

(40,000 – 36,000) ´ ($6,250/4,000) = $6,250 (U)

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