(Appendix 10A)Pictou Company Uses Two Raw Materials,X and Y,in the Manufacture

question 20

Essay

(Appendix 10A)Pictou Company uses two raw materials,X and Y,in the manufacture of its only product: Gizmo.Both materials are very close substitutes.The standard proportions for the manufacture of a unit of Gizmo are 6 units of X and 4 units of Y.The unit standard prices of X and Y are $16 and $20,respectively.During the month of August,the company used 3,000 units of X and 1,800 units of Y to produce 460 units of Gizmo.
Required:
a)Calculate the following variances for raw materials X and Y:
(i)Quantity variances.
(ii)Mix variances.
(iii)Yield variances
b)Suppose you are made aware that the assistant production manager recommended the departure from the standard mix.Should the assistant manager be commended? Explain

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Definitions:

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