Hung-1 Bhd. manufactures a chemical product, Product X, using two mixtures: Mate...
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Hung-1 Bhd. manufactures a chemical product, Product X, using two mixtures: Material A and Material B. The standard materials usage and cost are as follows:
| $ | ||
| Material A | 5Kg @$2 per Kg | 10 |
| Material B | 10Kg @$3 per Kg | 30 |
| 40 |
In October, 80 units of Product X were produced. The material usage recorded as follows:
· 600Kg for Material A
· 750Kg for Material B
Required:
Calculate the following variances, interpret the results and suggest the possible causes:
(a) Calculate the Material Usage Variance
(b) Calculate the Mix and Yield Variance
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