Chemcobre, Inc., produces chemical compounds for industrial use. Two liquid organic chem¬

icals, Liq-1 and Liq-2, are mixed and heated to produce a liquid compound that is sold to copper companies for use in a process that leaches copper from low-grade ore. After the liq¬

uid compound is produced by mixing and heating, it is placed in 50-gallon drums and moved to a warehouse. The compound is produced in batches and has the following standards:

During March, the following actual production information was provided;

Required:
1. Compute the materials mix and yield variances.
2. Compute the total materials usage variance for Liq-1 and Liq-2. Show that the total ma¬
terials usage variance is equal to the sum of the materials mix and yield variances.

Transcribed Image Text:

Material Standard Mix Standard Unit Price Standard Cost Liq-1 8,000 gallons $ 3.00 per gallon $24,000 Liq-2 2,000 gallons 15.00 per gallon 30,000 10,000 gallons $54,000 Yield 9,000 gallons