Direct materials efficiency variance, mix and yield variances; working backward. (30-40 minutes) Calypso, SA, manufactures and sells
Question:
Direct materials efficiency variance, mix and yield variances;
working backward. (30-40 minutes) Calypso, SA, manufactures and sells fertilisers. Calypso uses the following standard direct materials costs to produce 1 tonne of fertiliser: jui4
Note that 1.2 tonnes of input quantities are required to produce 1 tonne of fertiliser. No stocks of direct materials are kept. Purchases are made as needed, so all price variances are related to direct materials used. Calypso produced 2,000 tonnes of fertiliser in a particular period. The total direct materials yield variance for the period was Esc 35,000,000 U. The actual input mix for the period was 50% of Alpha and 50% of Gamma.
REQUIRED 1. Calculate the individual direct materials yield variances for the period.
Calculate the individual and total direct materials mix variances for the period.
Calculate the individual and total direct materials efficiency variances for the period.
Briefly describe the conclusions you would draw from the variance analyses.
Step by Step Answer:
Management And Cost Accounting
ISBN: 9780130805478
1st Edition
Authors: Charles T. Horngren, Alnoor Bhimani, Srikant M. Datar, George Foster