Home / Questions / Di r ect materials efficiency, yield and mix v arian c es Paix-Trolls SARL produces a petr...
Di r ect materials efficiency, yield and mix v arian c es.
Paix-Trolls SARL produces a petrol additive, Elysium, that increases engine efficiency and reduces petrol consumption. The actual and budgeted quantities (in litres) of materials required to produce Elysium and the budgeted prices of materials in August 2008 are as follows:
|
Chemical |
Actual quantity |
Budgeted quantity |
Budgeted price |
|
Echol |
24 080 |
25 200 |
€0.20 |
|
Protex |
15 480 |
16 800 |
0.45 |
|
Benz |
36 120 |
33 600 |
0.15 |
|
CT-40 |
10 320 |
8 400 |
0.30 |
|
Required |
|
|
|
1 Calculate the total direct materials efficiency variance for August 2008.
2 Calculate the total direct materials yield and mix variances for August 2008.
3 What conclusions would you draw from the variance analysis?
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