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McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of 100 gallons of its biggest
McKinney Solvents produces a wide variety products for the manufacturing industry. The standard mix for producing a single batch of 100 gallons of its biggest selling product is as follows: Input Chemical Quantity (in gallons) 22.5 40 Cost (per gallon) $ 54 29 20 Total Cost $1,215 1,160 X-1 X-2 X-3 62.5 125 1,250 $ 3,625 There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 10-gallon containers for sale. Thus, the standard material cost for a 10-gallon container is $362.50 [- ($3,625+ 100 gallons) 10 gallons per container The actual quantities of direct materials and the cost of the materials placed in production during March were as follows (materials are purchased and used at the same time) Input Chemical X-1 X-2 X-3 Quantity (in gallons) Total Cost 12,300 19,500 30,000 $ 637,800 564,700 622,000 61,800 $ 1,844,500 A total of 5,020 containers (50,200 gallons) were produced during March. A total of 5,020 containers (50,200 gallons) were produced during March. Required: Calculate the total direct material variance for the liquid product for the month of March and then further analyze the total varianc into: a. and b. Materials price and efficiency variances and materials mix and yield variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option. Direct Material Input Chemical Mix Variance Yield Variance Efficiency Variance Purchase Price Variance X-1 X-2 X-3 Total
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