Background:

Question:

Calculate the price, mix and yield variances for each feed product based on the original standards. Comment on the results.

At Bluegrass Farm, three feed products need to be mixed in the correct quantities to provide an appropriate nutritional diet for racehorses called 'Healthy Horse': Feed Product: Enriched Oat 10 kg @ Standard 6 kg @ Additive 4 kg @ 0.80 1.20 1.00 8.00 7.20 4.00 The planned input of 20kg of the feed products should produce 19.5kg of Healthy Horse'. The general price of Enriched Oat has increased during the period to 1.00 per kg. On the other hand, the price of Standard has decreased on the open market by 15%. During the last period 1287kg of Healthy Horse' have been produced and the following amounts of the feed products have been consumed. 610 kg of Enriched Oat 550 kg of Standard 180 kg of Additive 549 605 171 1,325