Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost Aranol Lendyl 2,400 gallons $5.00 per gallon 17,600 7.00 Total 20,000 gallons Yield 16,000 gallons $12,000 123,200 $135,200 During March, the following actual production information was provided: Direct Material Actual Mix Aranol Lendyl Total 52,000 gallons 148,000 200,000 gallons 166,000 gallons Yield Required: 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. Mix variance Yield variance Favorable Favorable 2. Compute the total direct materials usage variance for Aranol and Lendyl. Favorable

Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost Aranol Lendyl 2,400 gallons $5.00 per gallon 17,600 7.00 Total 20,000 gallons Yield 16,000 gallons $12,000 123,200 $135,200 During March, the following actual production information was provided: Direct Material Actual Mix Aranol Lendyl Total 52,000 gallons 148,000 200,000 gallons 166,000 gallons Yield Required: 1. Compute the direct materials mix and yield variances. In your computations, round the standard cost of the yield to 3 decimal places. Use rounded number in the subsequent computations. Mix variance Yield variance Favorable Favorable 2. Compute the total direct materials usage variance for Aranol and Lendyl. Favorable

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 25P: Taylor Company produces two industrial cleansers that use the same liquid chemical input: Pocolimpio...

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Vet-Pro, Inc., produces a veterinary grade anti-anxiety mixture for pets with behavioral problems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost Aranol 3,000 gallons $4.00 per gallon $ 13,000 Lendyl 17,000 6.00 102,000 Total 20,000 gallons $114,000 Yield 16,000 gallons During March, the following actual production information was provided: Direct Material Actual Mix Aranol 60,000 gallons Lendyl 140,000 Total 200,000 gallons Yield 166,000 gallons Vet-Pro, Inc., also uses two different types of direct labor in producing the anti-anxiety mixture: mixing and drum-filling labor (the completed product is placed into 50-gallon drums). For each batch of 20,000 gallons of direct materials input, the…
Vet-Pro, Ic., produces a veterinary grade anti-anxiety mixture for pets with behavioral prob- lems. Two chemical solutions, Aranol and Lendyl, are mixed and heated to produce a chemical that is sold to companies that produce the anti-anxiety pills. The mixture is produced in batches and has the following standards: Direct Material Standard Mix Standard Unit Price Standard Cost S 12,000 102,000 S114,000 Aranol $4.00 per gallon 3,000 gallons 17,000 20,000 gallons 16,000 gallons Lendyl Total 6.00 Yield During March, the following actual production information was provided: Direct Material Actual Mix 60,000 gallons 140,000 Aranol Lendyl 200,000 gallons 166,000 gallons Total Yield Required: 1. Compute the direct materials mix and yield variances. 2. Compute the total direct materials usage variance for Aranol and Lendyl. Show that the total direct materials usage variance is equal to the sum of the direct materials mix and yield variances.
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: Direct Material Mix Mix Proportion SP Standard Cost Solvent mix 855 gallons 0.95 $5.55 $4745.25 Aromatic compounds 45 0.05 8080.00 363600.00 Total 900 gallons $368,345.25 Yield 828 gallons On May 2, Chypre produced a batch of 1,150 gallons with the following actual results: Direct Material Actual Mix Solvent mix 1,086.75 gallons Aromatic compounds 63.25 Total 1,150 gallons Yield 1,015 gallons 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.fill in the blank 1 2. Calculate the standard cost per unit of the yield. If required,…
Addis Labs, Inc., produces various chemical compaounds for iindustrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard coasts for one unit of Fludex, as follows: Standard Quantity or Hour Standard price or rate Standard cost Direct materials 2.5 ounces ETB 20.00 per ounces ETB 50.00 Direct labor 1.4 hours ETB 12.50 per ounces ETB 17.50 Variable manufacturing overhead 1.4 hours ETB 3.50 per ounces ETB 4.90 ETB 72.40 During November, the following activity was recorded by the company relative to production of Fludex: Materials purchased 12,000 ounces at a cost of ETB 225,000. There was no beginning inventory of materials; however, at the end of the month, 2,500 ounces of material remained in ending The company employs 35 lab technicians to work on the production of F During November, each worked an average of 160 hours at an average rate of ETB 12 per…
Pharmaco Corporation buys three chemicals that are processed to produce two popular ingredients for liquid pain relievers. The three chemicals are in liquid form. The purchased chemicals are blended for two to three hours and then heated for 15 minutes. The results of the process are two separate ingredients, PR1 and PR2. For every 4,300 gallons of chemicals used, 2,000 gallons of each pain reliever are produced. The pain relievers are sold to companies that process them into their final form. The selling prices are 34 per gallon for PR1 and 45 per gallon for PR2. The costs to produce one batch (containing 2,000 gallons of each chemical) are as follows: The pain relievers are bottled in five-gallon plastic containers and shipped. The cost of each container is 2.10. The costs of shipping are 0.50 per container. Pharmaco Corporation could process PR1 further by mixing it with inert powders and flavoring to form tablets. The tablets can be sold directly to retail drug stores as a generic brand. If this route is taken, the revenue received per case of tablets would be 13.50, with eight cases produced by every gallon of PR 1. The costs of processing into tablets total 11.00 per gallon of PR1. Packaging costs 5.16 per case. Shipping costs are 1.68 per case. Required: 1. Should Pharmaco sell PR1 at split-off, or should PR1 be processed and sold as tablets? 2. If Pharmaco normally sells 26,000 gallons of PR1 per year, what will be the difference in profits if PR1 is processed further?
Chypre, Ic., produces a cologne mist using a solvent mix (water and pure alcohol) and aro- matic compounds (the scent base) that it sells to other companies for bottling and sale to con- sumers. Chypre developed the following standard cost sheet: Direct Material Mix Proportion SP Mix Standard Cost Solvent mix 760 gallons 0.95 5.27 S 4,005.20 Aromatic compounds Total 40 0.05 8,000.00 320,000.00 800 gallons 720 gallons S324,005.20 Yield On May 2, Chypre produced a batch of 1,000 gallons with the following actual results: Direct Material Actual Mix Solvent mix 945 gallons Aromatic compounds 55 1,000 gallons 880 gallons Total Yield Required: 1. Calculate the yield ratio. 2. Caleulate the standard cost per unit of the yield. (Round to the nearest cent.) 3. Calculate the direct materials yield variance. (Round to the nearest cent.) 4. Calculate the direct materials mix variance. (Round to the nearest cent.)
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Suppose that the separation process…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. If Garden were to use the constant…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Compute the cost of ending inventory…
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. How much in joint costs does Garden…
ABC Chemical Company manufactures industrial chemicals. The company plans to introduce a new chemical solution and needs to develop a standard product cost. The new chemical solution is made by combining a chemical compound (nyclyn) with a solution (salex), heating the mixture to boiling point, adding a second compound (protet), and bottling the resulting solution in 15-litre containers. The initial mix, which is 12 litres in volume, consists of 14 kilograms of nyclyn and 11.6 litres of salex. A 1-litre reduction in volume occurs during the boiling process. The solution is cooled slightly before 8 kilograms of protet are added. The protet evaporates, so it does not affect the total liquid volume. The purchase prices of the raw materials used in the manufacture of this new chemical solution are as follows: Nyclyn $4.90 per kilogram Salex $5.60 per litre Protet $6.80 per kilogram a. 102.36 b. None of the answers given c. 98.36 d. 93.36
Garden Labs produces a drug used for the treatment of arthritis. The drug is produced in batches. Chemicals costing $50,000 are mixed and heated, then a unique separation process extracts the drug from the mixture. A batch yields a total of 3,000 gallons of the chemicals. The first 2,500 gallons are sold for human use while the last 500 gallons, which contain impurities, are sold to veterinarians. The costs of mixing, heating, and extracting the drug amount to $155,000 per batch. The output sold for human use is pasteurized at a total cost of $130,000 and is sold for $600 per gallon. The product sold to veterinarians is irradiated at a cost of $20 per gallon and is sold for $450 per gallon. In March, Garden, which had no opening inventory, processed one batch of chemicals. It sold 2,000 gallons of product for human use and 300 gallons of the veterinarian product. Garden uses the net realizable value method for allocating joint production costs. Q. Calculate the gross margin on the sale…