Exercise on Materials & Labor Mix and Yield variances

Q1
Product GX consists of a mix of three materials, J, K and L. The standard material
cost of a unit of GX is as follows:

Material J 5 kg at $4 per kg
Material K 2 kg at $12 per kg
Material L 3 kg at $8 per kg
During March, 3,000 units of GX were produced, and actual usage was:
Material J 13,200 kg
Material K 6,500 kg
Material L 9,300 kg

What was the materials yield variance for March?

Q2
The Organic Bread Company (OBC) makes a range of breads for sale direct to the
public. The production process begins with workers weighing out ingredients on
electronic scales and then placing them in a machine for mixing. A worker then
manually removes the mix from the machine and shapes it into loaves by hand, after
which the bread is then placed into the oven for baking.

All baked loaves are then inspected by OBC’s quality inspector before they are
packaged up and made ready for sale.

Any loaves which fail the inspection are donated to a local food bank.

The standard cost card for OBC’s ‘Mixed Bloomer’, one of its most popular loaves, is
as follows:
White flour 450 grams at $1·80 per kg
Wholegrain flour 150 grams at $2·20 per kg
Yeast 10 grams at $20 per kg
Total
610 grams

Budgeted production of Mixed Bloomers was 1,000 units for the quarter, although
actual production was only 950 units. The total actual quantities used and their
actual costs were:
Kg
White flour 408·5
Wholegrain flour 152·0
Yeast 10·0
Total
570·5

Required:
(a) Calculate the total material mix variance and the total material yield variance for
OBC for the last quarter.

(b) Using the information in the question, suggest possible reasons why an
ADVERSE MATERIAL YIELD variance could arise at OBC.
Q3
Direct Labor Mix and Yield Variances
Delano Company uses two types of direct labor for the manufacturing of its products:
fabricating and assembly. Delano has developed the following standard mix for direct
labor, where output is measured in number of circuit boards.

During the second week in April, Delano produced the following results:

Required:
1. Calculate the yield ratio.
2. Calculate the standard cost per unit of the yield. Round your answers to the
nearest cent.
3. Calculate the direct labor yield variance.
4. Calculate the direct labor mix variance.