DIRECT MATERIALS MIX AND YIELD VARIANCES Verde Sabor produces a green enchilada sauce using tomatoes and green chili peppers. Verde developed the following standard cost sheet:
|
Direct Material |
Mix |
Mix Proportion |
SP |
Standard Cost |
|
Tomatoes |
630 ounces |
0.90 |
$0.020 |
$12.60 |
|
Chili peppers |
70 |
0.10 |
0.026 |
1.82 |
|
Total |
700 ounces |
|
|
$14.42 |
|
Yield |
577.5 ounces |
|
|
|
On March 2, Verde produced a batch of 112,000 ounces with the following actual results:
|
Direct Material |
Actual Mix |
|
Tomatoes |
89,600 ounces |
|
Chili peppers |
22,400 |
|
Total |
112,000 ounces |
|
Yield |
88,900 ounces |
Required:
1. Calculate the yield ratio.
2. Calculate the standard cost per unit of yield.
3. Calculate the direct materials yield variance.
4. Calculate the direct materials mix variance.