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The Stronghold Corporation Uses Two Materials and Two Types of Labor

Question 125

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The Stronghold Corporation uses two materials and two types of labor to manufacture a product. The following are their standards:
The Stronghold Corporation uses two materials and two types of labor to manufacture a product. The following are their standards:    Yield 5,000 units Labor Type Standard Mix Standard Unit Price Standard Cost Grinding 300 hours $8.00 per unit $2,400 Polishing 150 hours 6.00 per unit $ 900 Yield 6,000 units During the month of November, the following actual production information was provided: Material Actual Mix P P 30,000 units Q Q 20,000 units Yield 30,000 units Labor Type Actual Mix Grinding 4,500 hours Polishing 2,500 hours Yield 30,000 units Required calculations:  a. Material mix variance b. Material yield variance c. Labor mix variance d. Labor yield variance Yield 5,000 units
Labor Type Standard Mix Standard Unit Price Standard Cost
Grinding 300 hours $8.00 per unit $2,400
Polishing 150 hours 6.00 per unit $ 900
Yield 6,000 units
During the month of November, the following actual production information was provided:
Material Actual Mix
P P 30,000 units
Q Q 20,000 units
Yield 30,000 units
Labor Type Actual Mix
Grinding 4,500 hours
Polishing 2,500 hours
Yield 30,000 units
Required calculations:
a. Material mix variance
b. Material yield variance
c. Labor mix variance
d. Labor yield variance

Correct Answer:

verifed

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a. Material mix variance:
SM(P) = (5,500...

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