Question
Cyanol Chemicals Inc. manufactures a variety of chemical compounds and liquids for industrial uses. The budgeted quantities of inputs for producing this month's output
Cyanol Chemicals Inc. manufactures a variety of chemical compounds and liquids for industrial uses. The budgeted quantities of inputs for producing this month's output of liquid cleanser is as follows: Liquid Chemical Input Quantity Cost (per bottle) (per litre) Glycol 3.2 litres $2.00 Benzene 6.8 litres 1.00 Liquid Cleanser budgeted output: 5,000 bottles this month The actual quantities of direct materials and the cost of the materials placed into production to produce 5,000 bottles of output during November were as follows: Liquid Chemical Input Quantity Total (in litres) Costs Glycol 20,880 $42,804 Benzene 31,320 28,188 Required: 1. Calculate the budgeted and actual mix percentages for each input for November's output of liquid cleanser. 2. Calculate the total: a. Direct materials mix variance b. Direct materials yield variance c. Direct materials efficiency variance 3. Interpret the results of your mix and yield variances.
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