A Company Makes a Product Using Two Materials, One of Which

question 89

Multiple Choice

A company makes a product using two materials, one of which is interchangeable with a third material. The standards for producing one 200-pound batch are presented below. The last 200-pound batch was produced using 140 pounds of M and 90 pounds of O. The price of M was $0.03 per pound and the actual price of O was $0.10.
$$\begin{array} { l c c c } & \text { Standard Quartity } & \text { Standard } & \\\text { Material } & ( \mathrm { Ibs } ) & \text { Cost/lb. } & \text { Total Cost } \\\mathrm { O } & 0 & \$ 0.10 & \$ 0 \\\mathrm { H } & 80 & 0.08 & 6.40 \\\mathrm { M } & \underline{120} & 0.02 & \underline{ 2.40} \\& \underline{200} & & \underline{ \$ 8.80}\end{array}$$
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What is the material mix variance?

• A) $1.68.
• B) $3.00.
• C) $1.32.
• D) $0.84.

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Definitions:

Granulation Tissue

The new vascular tissue formed in the healing of wounds, characterized by red, granular appearance due to the proliferation of capillaries.

Dense Irregular Collagenous Connective Tissue

A type of connective tissue with densely packed collagen fibers arranged in an irregular pattern, providing strength and flexibility to structures like the dermis of the skin.

Avascular

Describes tissues or regions in the body that lack blood vessels, and therefore have no direct blood supply.

Epithelial Tissue

A type of tissue that lines the surfaces of the body, including skin, organs, and cavities, functioning as a protective barrier.