Product GX consists of a mix of three materials, J, K and L. The standard material cost of a unit of GX is as follows:
$
Material J 5 kg at $4 per kg 20
Material K 2 kg at $12 per kg 24
Material L 3 kg at $8 per kg 24
During March, 3,000 units of GX were produced, and actual usage was:
Material J 13,200 kg
Material K 6,500 kg
Material L 9,300 kg
What was the materials yield variance for March?
3,000 units should use 10 kg each (3,000 x 10) = 30,000 kg
3,000 units did use = 29,000 kg
Difference = 1,000 kg favourable
Valued at $6·80 per kg ($68/10 kg)
Variance = $6,800 favourable