The Stronghold Corporation Uses Two Materials and Two Types of Labor

question 11

Essay

The Stronghold Corporation uses two materials and two types of labor to manufacture a product. The following are their standards:
Yield 5,000 units
Labor Type Standard Mix Standard Unit Price Standard Cost
Grinding 300 hours $8.00 per unit $2,400
Polishing 150 hours 6.00 per unit $ 900
Yield 6,000 units
During the month of November, the following actual production information was provided:
Material Actual Mix
P P 30,000 units
Q Q 20,000 units
Yield 30,000 units
Labor Type Actual Mix
Grinding 4,500 hours
Polishing 2,500 hours
Yield 30,000 units
Required calculations:
a. Material mix variance
b. Material yield variance
c. Labor mix variance
d. Labor yield variance

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Definitions:

Learned

Pertains to knowledge or skills acquired through study, experience, or teaching.

Shared

Characteristic of something that is used or owned collectively by a group or community.

Product

A good or service that is created, offered, and sold to customers.

Activity-Based Costing

A pricing strategy where the organization's activities are pinpointed, and the costs for these activities are distributed across all products and services based on their respective consumption levels.