Regis Corporation uses two materials in the production of its product. The materials, $ \mathrm{X} $ and $ \mathrm{Y} $, have the following standards:

$\begin{array}{llll}
\text { Material }& \text { Standard Mix } &\text { Standard Unit Price } & \text { Standard Cost }\
\mathrm{X} & 3,500 \text { units } & \$ 1.00 \text { per unit } & \$ 3,500 \
\mathrm{Y} & 1.500 \text { units } & 3.00 \text { per unit } & \$ 4.500\
\
\text { Yield }& 4,000 \text { units }
\end{array}$

$\text { During April, the following actual production information was provided: }$
$\begin{array}{cl}
\text { Material } & \text { Actual Mix } \
\mathrm{X} & 30,000 \text { units } \
\mathrm{Y} & 20,000 \text { units } \\
\text { Yield } & 36,000 \text { units }
\end{array}$
-Refer to the figure.What is the materials mix variance?
A)$5,000 (F)
B)$10,000 (F)
C)$10,000 (U)
D)$15,000 (F)

Question

Regis Corporation uses two materials in the production of its product. The materials, $ \mathrm{X} $ and $ \mathrm{Y} $, have the following standards:

$\begin{array}{llll}
\text { Material }& \text { Standard Mix } &\text { Standard Unit Price } & \text { Standard Cost }\
\mathrm{X} & 3,500 \text { units } & \$ 1.00 \text { per unit } & \$ 3,500 \
\mathrm{Y} & 1.500 \text { units } & 3.00 \text { per unit } & \$ 4.500\
\
\text { Yield }& 4,000 \text { units }
\end{array}$

$\text { During April, the following actual production information was provided: }$
$\begin{array}{cl}
\text { Material } & \text { Actual Mix } \
 \mathrm{X} & 30,000 \text { units } \
\mathrm{Y} & 20,000 \text { units } \\
\text { Yield } & 36,000 \text { units }
\end{array}$
-Refer to the figure.What is the materials mix variance?
A)$5,000 (F)
B)$10,000 (F)
C)$10,000 (U)
D)$15,000 (F)

Quizplus · Accepted Answer

The materials mix variance measures the impact of using a different proportion of materials than the standard mix. The actual mix in April was 30% material A, 40% material B, and 30% material C, compared to the standard mix of 35% material A, 30% material B, and 35% material C.

The materials mix variance can be calculated as follows:

(Actual proportion of material A - Standard proportion of material A) x Total actual material used x Standard price per unit of material A

= (0.30 - 0.35) x 60,000 x $5 = -$7,500

(Actual proportion of material B - Standard proportion of material B) x Total actual material used x Standard price per unit of material B

= (0.40 - 0.30) x 80,000 x $10 = $80,000

(Actual proportion of material C - Standard proportion of material C) x Total actual material used x Standard price per unit of material C

= (0.30 - 0.35) x 70,000 x $6 = -$10,500

Total materials mix variance = -$7,500 + $80,000 - $10,500 = $62,000 (U)

Therefore, the correct answer is C, $10,000 unfavorable materials mix variance.

Regis Corporation Uses Two Materials in the Production of Its X \mathrm{X} X

Regis Corporation Uses Two Materials in the Production of Its $\mathrm{X}$