John's Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixtur to combine equal parts of Weed-X and Pest-o. Weed-X has a standard cost of $10.00 per gallon and Pesto-O has a standard cost of $24.80 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 534,000 square yards of lawn. For the past season, John treated 649,000 square yards. He used 4,200 gallons of Weed-X and 4,000 gallons of Pest-O. He paid a total of $35,000 for the Weed-X and $97,200 for the Pest-O. Required: a. Compute the materials price and efficiency variances for the season. b. Compute the materials mlx and yield variances for the season.

John's Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixtur to combine equal parts of Weed-X and Pest-o. Weed-X has a standard cost of $10.00 per gallon and Pesto-O has a standard cost of $24.80 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 534,000 square yards of lawn. For the past season, John treated 649,000 square yards. He used 4,200 gallons of Weed-X and 4,000 gallons of Pest-O. He paid a total of $35,000 for the Weed-X and $97,200 for the Pest-O. Required: a. Compute the materials price and efficiency variances for the season. b. Compute the materials mlx and yield variances for the season.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 23E: Coyle Pharmaceuticals produces two organic chemicals (Org AB and Org XY) used in the production of...

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John’s Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixture to combine equal parts of Weed-X and Pest-O. Weed-X has a standard cost of $10.40 per gallon and Pesto-O has a standard cost of $25.20 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 535,000 square yards of lawn. For the past season, John treated 646,000 square yards. He used 3,600 gallons of Weed-X and 3,400 gallons of Pest-O. He paid a total of $30,960 for the Weed-X and $82,960 for the Pest-O. Required: a. Compute the materials price and efficiency variances for the season. b. Compute the materials mix and yield variances for the season.
Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost Aranol 3,000 gallons $4.00 per gallon $ 13,000 Lendyl 17,000 6.00 102,000 Total 20,000 gallons $114,000 Yield 16,000 gallons During March, the following actual production information was provided: Direct Material Actual Mix Aranol 60,000 gallons Lendyl 140,000 Total 200,000 gallons Yield 166,000 gallons Vet-Pro, Inc., also uses two different types of direct labor in producing the anti-anxiety mixture: mixing and drum-filling labor (the completed product is placed into 50-gallon drums). For each batch of 20,000 gallons of direct materials input, the…
Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost Aranol 3,000 gallons $4.00 per gallon $ 12,000 Lendyl 17,000 6.00 102,000 Total 20,000 gallons $114,000 Yield 16,000 gallons During March, the following actual production information was provided: Direct Material Actual Mix Aranol 60,000 gallons Lendyl 140,000 Total 200,000 gallons Yield 166,000 gallons Vet-Pro, Inc., also uses two different types of direct labor in producing the anti-anxiety mixture: mixing and drum-filling labor (the completed product is placed into 50-gallon drums). For each batch of 20,000 gallons of direct materials input, the…
Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Aranol 2,400 gallons $5.00 per gallon Lendyl 17,600 7.00 Total 20,000 gallons Yield 16,000 gallons Standard Cost $12,000 123,200 $135,200 During March, the following actual production information was provided: Direct Material Aranol Lendyl Total Actual Mix 52,000 gallons 148,000 200,000 gallons 166,000 gallons Yield Required: 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. Mix variance Yield variance x Favorable Favorable 2. Compute the total direct materials usage variance for Aranol and…
ABC Chemical Company manufactures industrial chemicals. The company plans to introduce a new chemical solution and needs to develop a standard product cost. The new chemical solution is made by combining a chemical compound (nyclyn) with a solution (salex), heating the mixture to boiling point, adding a second compound (protet), and bottling the resulting solution in 15-litre containers. The initial mix, which is 12 litres in volume, consists of 14 kilograms of nyclyn and 11.6 litres of salex. A 1-litre reduction in volume occurs during the boiling process. The solution is cooled slightly before 8 kilograms of protet are added. The protet evaporates, so it does not affect the total liquid volume. The purchase prices of the raw materials used in the manufacture of this new chemical solution are as follows: Nyclyn $4.90 per kilogram Salex $5.60 per litre Protet $6.80 per kilogram a. 102.36 b. None of the answers given c. 98.36 d. 93.36
Crystal Clear Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-cumfilter that only purifies water meant for drinking. The unit that attaches to the faucet is sold for $90 and has variable costs of $25. The pitcher-cum-filter sells for $110 and has variable costs of $20. Crystal Clear sells two faucet models for every three pitchers sold. Fixed costs equal $1,200,000. Q1. What is the breakeven point in unit sales and dollars for each type of filter at the current sales mix?
Crystal Clear Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher-cumfilter that only purifies water meant for drinking. The unit that attaches to the faucet is sold for $90 and has variable costs of $25. The pitcher-cum-filter sells for $110 and has variable costs of $20. Crystal Clear sells two faucet models for every three pitchers sold. Fixed costs equal $1,200,000. Q1. Crystal Clear is considering buying new production equipment. The new equipment will increase fixed cost by $208,000 per year and will decrease the variable cost of the faucet and the pitcher units by $5 and $10, respectively. Assuming the same sales mix, how many of each type of filter does Crystal Clear need to sell to break even?
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Suppose that the separation process…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. If Garden were to use the constant…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. How much in joint costs does Garden…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Compute the cost of ending inventory…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Calculate the gross margin on the sale…