Question
To produce 19 litres of Product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.
To produce 19 litres of Product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.
Chemical A has a standard cost of $ 20 per litre and chemical B has a standard cost of $25 per litre.
During September, the actual results showed that 1,850 litres of Product X were produced, using a total input of 900 litres of chemical A and 1,100 litres of chemical B.
The actual costs of chemical A and B were at the standard cost of $ 20 and $ 25 per litre respectively.
Based on the above information, which of the following statements is true?
A) Both variances were adverse
B) Both variances were favourable
C) The total mix variance was adverse and the total yield variance was favourable
D) The total mix variance was favourable and the total yield variance was adverse
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