Question

John’s Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixture to combine equal parts of Weed-X and Pest-O. Weed-X has a standard cost of $10.00 per gallon and Pesto-O has a standard cost of $24.90 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 534,000 square yards of lawn.

For the past season, John treated 658,000 square yards. He used 4,200 gallons of Weed-X and 4,100 gallons of Pest-O. He paid a total of $36,000 for the Weed-X and $97,170 for the Pest-O.

Required:

a. Compute the materials price and efficiency variances for the season.

b. Compute the materials mix and yield variances for the season.

	Materials Price Efficiency Variances Weed-X Pest-O Total

Answer 1

we will first put data in tabular form

Material	Standard quantity for 100 square yard (1 gallon)		Standard rate	Standard amount
Weed-X	0.5		$10	$5[10*0.50]
Pest o	0.5		$24.90	$12.45[$24.90*0.5]
			Total	$17.45

Actual output = 658,000 square yards

Actual

Material	Actual quantity	Actual rate per gallon	Actual cost
Weed-X	4,200	$8.57[36,000/4,200]	$36,000
Pest o	4,100	$23.7[97,170/4,100]	$97,170
Total			$133,170

a) Material price variance

Material	Standard rate	Actual quantity	Variance
Weed X	$10	4,200	$6,000 Favorable[$36,000]-[$10*4,200]	As the actual cost< standard cost the variance is favorable
Pest O	$24.90	4,100	$4,920 Favorable[$97,170]-[$24.9*4,100]	As the actual cost< standard cost the variance is favorable
		Net material price variance	$10,920favorable[6000+4920]

Material price variance = AQ(SP-AP)

=AQ*SP - AQ*AP

2.Material effeciency variance

SP(SQ-AQ)

SQ for actual output will be based on 658,000 square yards

Material	Standard rate	Actual quantity	Standard quantity	Variance
Weed X	$10	4,200	3,290[658,000/100 square yard]*0.5 per 100square yard	$9,100 unfavorable[$10 (3,290-4,200)]	As the actual quantity>standar d the variance is unfavorable)
Pest O	$24.90	4,100	3,290	$20,169 unfavorable[$24.9(3,290-4,100)]
			Material effeciency variance	$29,269 unfavorable

B)

material mix variance

Material	Standard rate	Actual quantity	Standard quantity per actual throughput	Variance
Weed X	$10	4,200	4,150[8,300*0.5]	$500 unfavorable[$10 (4,150-4,200)]	As the actual quantity>standar d the variance is unfavorable)
Pest O	$24.90	4,100	4,150	$1,245 favorable[$24.9(4150-4,100)]	Ast the actual quantity< standar quantity the variance is favorable
		8,300		$745 f avorable [1245-500]	Material mix variance

material yield variance

Material	Standard rate	Standard quantity	Standard quantity per actual throughput	Variance
Weed X	$10	3,290	4,150	$8,600 unfavorable[$10 (4,150-3,290]	As the Standard quantity per actual throughput quantity>standar d the variance is unfavorable)
Pest O	$24.90	3,290	4,150	$21,414 unfavorable [$24.9(4150-3,290)]	s the Standard quantity per actual throughput quantity>standar d the variance is unfavorable
Total		8,300		$30,014 favorable [8,600+21,414]	Material yield variance

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