The Following Information Is Provided About Three Materials Utilized in the Production

question 93

Multiple Choice

The following information is provided about three materials utilized in the production of a product: Material Standard Mix Standard Unit Price Standard Cost
X 1,250 units $3.00 per unit $3,750
Y 750 units 5.00 per unit $3,750
Z 500 units 4.00 per unit $2,000
Yield 2,250 units
During May, the following actual production information was provided:
Material Actual Mix
X 10,000 units
Y 5,000 units
Z 2,500 units
Yield 15,000 units
Calculate the Material mix variance.

• A) $1,500(U)
• B) $1,500(F)
• C) $1,250(U)
• D) $1,250(F)

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Definitions:

Owner's Capital

The amount of equity a business owner has invested in the firm plus any profits retained in the business.

Revenues

The income generated from normal business operations and other activities.

Business Documents

Written records that provide evidence of business transactions, agreements, and other business activities.

Ledger Accounts

Records within a ledger that show all the financial transactions of a specific account, summarized.