Direct Materials Usage Variance, Direct Materials Mix and Yield VariancesVet-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 soldto companies that produce the anti-anxiety pills. The mixture is produced in batches and has thefollowing standards:Direct Material Standard Mix2,000 gallons18,00020,000 galloks16,000 gallonsAranolLendylTotalAranolLendylTotalYieldDuring March, the following actual production information was provided:Direct MaterialYieldRequired:Standard Unit Price$5.00 per gallon7.00Mix varianceYield varianceActual MixStandard Cost58,000 gallons142,000200,000 gallons168,000 gallons$10,000126,000$136,0001. Compute the direct materials mix and yield variances. In your computations, round thestandard cost of the yield to 3 decimal places. Use rounded number in the subsequentcomputations.=2. Compute the total direct materials usage variance for Aranol and Lendyl.

Variance analysis is done for the internal purpose by the management accounting department. 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 2,000 gallons 18,000 20,000 galloks 16,000 gallons During March, the following actual production information was provided: Aranol Lendyl Total Yield Standard Unit Price $5.00 per gallon 7.00 Standard Cost $10,000 126,000 $135,000

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 2,000 gallons 18,000 20,000 galloks 16,000 gallons During March, the following actual production information was provided: Aranol Lendyl Total Yield Standard Unit Price $5.00 per gallon 7.00 Standard Cost $10,000 126,000 $135,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 34P: Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems....

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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: During March, the following actual production information was provided: Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.
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