Artigas Enterprises uses two materials in the production of its product. The materials, L and M, have the following standards: Material Standard Mix Standard Unit Price Standard Cost
L 1,750 units $0.50 per unit $ 875
M 750 units 1.50 per unit $1,125
Yield 2,000 units
During January, the following actual production information was provided:
Material Actual Mix
L 15,000 units
M 10,000 units
Yield 18,000 units
What is the materials yield variance?
A) $2,500 (U)
B) $2,000 (U)
C) $2,500 (F)
D) $2,000 (F)

Question

Quizplus · Accepted Answer

To calculate the materials yield variance, we compare the actual yield of 18,000 units to the expected yield of 2,000 units based on the standard mix.

Expected usage of material L = 1,750 units x 2,000 units = 3,500,000 units
Actual usage of material L = 15,000 units
Material L yield variance = (3,500,000/15,000) - 1,750 = 233.33 (F)

Expected usage of material M = 750 units x 2,000 units = 1,500,000 units
Actual usage of material M = 10,000 units
Material M yield variance = (1,500,000/10,000) - 750 = 150 (F)

Total materials yield variance = (233.33 + 150) x $1.50 = $2,000 (U)

Artigas Enterprises Uses Two Materials in the Production of Its