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Pinnuck Products makes a liquid solvent using two grades of petroleum (Grade-1 and Grade-2). Within certain limits, the two grades can substitute for one
Pinnuck Products makes a liquid solvent using two grades of petroleum (Grade-1 and Grade-2). Within certain limits, the two grades can substitute for one another, so the actual mix of inputs often differs from the standard mix. The standard cost of a unit of output follows. Input Grade Grade-1 Grade-2 Input Grade Grade-1 Grade-2 8,000 units were produced during August. The actual inputs purchased and used during August were as follows. Cost per Unit $7.90 $6.20 Quantity 1.2 units 0.8 units Input Grade Grade-1 Grade 2 Total Total Quantity 10,000 units 6,200 units Required: Prepare a complete materials variance analysis show the material price variance, the materials efficiency variance, the material mix variance, and the material yield variance. (Do not round intermediate calculations. Round "Standard mix values" to 2 decimal places. 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.) Cost per Unit $8.00 $6.00 Mix Variance Direct Material Yield Variance Efficiency Variance Purchase Price Variance
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