Adams Corporation Manufactures a Certain Product by Mixing Three Kinds

question 18

Essay

Adams Corporation manufactures a certain product by mixing three kinds of materials in large batches.The blend master has the responsibility for maintaining the quality of the product,and this often requires altering the proportions of the various ingredients.Standard costs are used to provide material control information.The standard material inputs per batch are:

	Quantity (pounds)	Price (per pound)	Standard Cost of Material
Material A	420	$0.06	$25.20
Material B	70	0.12	8.40
Material C	10	0.25	2.50
Total batch	500		$36.10

The finished product is packed in 50-pound boxes;the standard material cost of each box is,therefore,$3.61.
During January,the following materials were put in process:
$\begin{array}{l}\begin{array}{ll}\text { Material } A & 181,000 &Ibs\\\text { Material B } & 33,000 \\\text { Material C } & \underline{6,000}\\\text { Total }&220,000 &Ibs \end{array}\\\end{array}$

Inventories in process totaled 5,000 pounds at the beginning of the month and 8,000 pounds at the end of the month.It is assumed that these inventories consisted of materials in their standard proportions.Finished output during January amounted to 4,100 boxes.
Required:Compute the total material quantity variance for the month and break it down into mix and yield components.

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Definitions:

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