Plano Products manufactures a wide variety of chemical compounds and liquids for industrial uses. The standard mix for producing a single batch of 100 liters of its biggest selling product is as follows.

Input	Quantity				Cost				Total
Chemical	(in liters)				(per liter)				Cost
Chem-A		33			$	35			$	1,155
Chem-B		73				25				1,825
Chem-C		19				10				190
		125							$	3,170

There is a standard 20 percent loss in liquid volume during processing due to evaporation. The finished liquid is put into 23-liter containers for sale. Thus, the standard material cost for a 23-liter container is $729.10 [= ($3,170 100 liters) 23 liters per container].

The actual quantities of direct materials and the cost of the materials placed in production during September were as follows (materials are purchased and used at the same time).

Input Chemical	Quantity (in liters)				Total Cost
Chem-A		25,160			$	734,248
Chem-B		43,900				1,182,320
Chem-C		30,540				1,288,220
		99,600			$	3,204,788

A total of 9,300 containers (213,900 liters) were produced during September.

Required:

Calculate the total direct material variance for the liquid product for the month of September and then further analyze the total variance into:

a. & b. Materials price and efficiency variances and materials mix and yield variances. (Do not round intermediate calculations. Round Standard mix values to 3 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. Enter your answers rounded to the nearest whole number.)

Explanation

a. & b. Material: Chem A: Actual (AP AQ) = $734,248 (SP AQ) = $35 25,160 = $880,600 (SP ASQ) = $35 (0.264^a 99,600) = $35 26,294 = $920,304 Flexible Production Budget: $35 (33 2,139^b) = $2,470,545

Mix variance: $920,304 $880,600 = $39,704 F Yield variance: $2,470,545 $920,304 = $1,550,241 F Efficiency variance: $880,600 $2,470,545 = $1,589,945 F Purchase price variance: $734,248 $880,600 = $146,352 F

Chem B: Actual (AP AQ) = $1,182,320 (SP AQ) = $25 43,900 = $1,097,500 (SP ASQ) = $25 (0.584^a 99,600) = $25 58,166 = $1,454,160 Flexible Production Budget: $25 (73 2,139^b) = $3,903,675

Mix variance: $1,454,160 $1,097,500 = $356,660 F Yield variance: $1,454,160 $3,903,675 = $2,449,515 F Efficiency variance: $1,097,500 $3,903,675 = $2,806,175 F Purchase price variance: $1,182,320 $1,097,500 = $84,820 U

Chem C: Actual (AP AQ) = $1,288,220 (SP AQ) = $10 30,540 = $305,400 (SP ASQ) = $10 (0.152^a 99,600) = $10 15,139 = $151,392 Flexible Production Budget: $10 (19 2,139^b) = $406,410

Mix variance: $305,400 $151,392 = $154,008 U Yield variance: $151,392 $406,410 = $255,018 F Efficiency variance: $305,400 $406,410 = $101,010 F Purchase price variance: $1,288,220 $305,400 = $982,820 U

^aStandard mix: 0.264 = 33 125; 0.584 = 73 125; 0.152 = 19 125. ^bGood output: 2,139 = 213,900 liters 100 liters in standard cost sheet.

Total: Mix variance: $2,283,500 $2,525,856 = $242,356 F Yield variance: $2,525,856 $6,780,630 = $4,254,774 F Efficiency variance: $2,283,500 $6,780,630 = $4,497,130 F Purchase price variance: $3,204,788 $2,283,500 = $921,288 U