) Saskatoon Company uses two raw materials, A and B, in the manufacture of its only product: Zizbo. The materials are very close substitutes. The standard proportions for the manufacture of a unit of Zizbo are 2 units of A and 3 units of B. The unit standard prices of A and B are $10 and $8, respectively. During the month of August, the company used 450 units of A and 750 units of B to produce 230 units of Zizbo.
- For raw material A,what were the mix and yield variances,respectively?
A) $60 favourable and $440 unfavourable.
B) $200 unfavourable and $300 favourable.
C) $300 favourable and $200 unfavourable.
D) $300 unfavourable and $200 favourable.

Question

Quizplus · Accepted Answer

The mix and yield variances are calculated as follows:
Mix variance = (Actual quantity of raw material used - Expected quantity of raw material for actual output) x Standard price per unit
= (7200kg - 7600kg) x $0.05/kg
= $200 unfavorable 
Yield variance = (Actual output - Expected output) x Standard price per unit
= (6000 units - 5600 units) x $0.10/unit
= $400 favorable 
Therefore, the mix variance is $200 unfavorable and the yield variance is $400 favorable. The options A, B, and D are not correct as they do not match with these calculations. The correct answer is option C, which matches with the above calculations.

) Saskatoon Company Uses Two Raw Materials, a and B