Question

Chypre, Inc., produces a cologne mist using a solvent mix (water and pure alcohol) and aromatic compounds (the scent base) that it sells to other companies for bottling and sale to consumers. Chypre developed the following standard cost sheet: Mix Mix Proportion Direct Material Solvent mix Aromatic compounds 665 gallons 35 0.95 0.05 SP $5.35 8060.00 Standard Cost $3557.75 282100.00 $285,657.75 Total 700 gallons Yield 644 gallons On May 2, Chypre produced a batch of 900 gallons with the following actual results: Actual Mix Direct Material Solvent mix Aromatic compounds Total 850.5 gallons 49.5 900 gallons 765 gallons Yield Required: Instructions for parts 3 and 4: If a variance is zero, enter "0" and select "Not applicable" from the drop down box. 1. Calculate the yield ratio. If required, round your answer to two decimal places 0.92 → 2. Calculate the standard cost per unit of the yield. If required, round your answer to the nearest cent. $ 443.57 per unit of the yield 3. Calculate the direct materials yield variance. If required, round your answer to the nearest cent. $ 27,944.91 Unfavorable 4. Calculate the direct materials mix variance. If required, round your answer to the nearest cent. Unfavorable

Answer 1

4)
Direct Material	AQ	SM	AQ – SM	SP	(AQ – SM) x SP
Solvent mix	850.5	855	-4.5	$         5.35	$      (24.08)
Aromatic compounds	49.5	45	4.5	$  8,060.00	$ 36,270.00
Direct material mix variance					$ 36,245.93	U
Sales Mix  = total actual mix x mix proportion
Solvent mix = 900 x 95%
Aromatic compounds = 900 x 5%