Blitz Inc. uses three different substitutable products in the production process. In the last production period, they

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Blitz Inc. uses three different substitutable products in the production process. In the last production period, they used a total of 555,000 litres: 138,750 litres of solution E, 222,000 litres of solution T; and 194,250 litres of solution A. The standard cost card follows:

 Standard Quantity 10 litres Cost $0.50 per litre $0.10 per litre $0.35 per litre Solution E $ 5.00 21 litres Solution T


During this production period, 11,000 batches were produced.


Required:

A. Calculate the materials quantity variance.

B. Calculate the mix and yield variances for each solution.

C. Calculate the total mix and yield variances.

D. Write a memo explaining to management what happened during this production period.

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Related Book For  book-img-for-question

Cost Management Measuring, Monitoring And Motivating Performance

ISBN: 1601

3rd Canadian Edition

Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook

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