A chemical company in the Midwest produces a solvent used by manufacturers of plastics.Three basic chemicals go into this solvent.The standards for one-liter of this product are:
Chemical A: 500 ml.@ $10 per liter
Chemical B: 100 ml.@ $50 per liter
Chemical C: 400 ml.@ $20 per liter
During the last period,10,000 liters of the solvent were produced and the company purchased the following amounts of each chemical:
Chemical A: 6,400 liters @ $9.00 per liter
Chemical B: 900 liters @ $75.00 per liter
Chemical C: 4,200 liters @ $20.00 per liter
Because these chemicals are volatile,the company uses them immediately upon purchase,so there are no beginning and ending inventories.Required:
(Be sure to indicate whether the variance is favorable or unfavorable. )
a.Compute the direct material price variances.b.Compute the direct material efficiency variances.c.Compute the direct material mix variances.d.Compute the direct material yield variances.
Correct Answer:
Verified
b.A: $14...
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