Question : 7.3   Distinguish between Levels 3 and 4 variance analyses for : 1186322

7.3   Distinguish between Levels 3 and 4 variance analyses for substitute inputs, and calculate Level 4 direct mix and yield variances.

1) The direct materials yield variance is the difference between: 1) the budgeted cost for the actual mix of the total quantity of direct materials used, and 2) the budgeted cost of the budgeted mix of the actual total quantity of direct materials used.

2) The direct materials mix variance is the difference between: 1) the actual cost of direct materials based on the actual total quantity of all direct material inputs used, and 2) the flexible-budget cost of direct materials based on the budgeted total quantity of direct material inputs for the actual output.

3) An unfavourable direct materials mix variance results when cheaper direct materials are substituted for more expensive direct materials.

4) A favourable direct materials yield variance results when less direct materials are used than planned.

5) More insight into the efficiency variance for direct materials can be gained by subdividing it into the direct materials

A) mix and volume variances.

B) market-share and market-size variances.

C) rate and usage variances.

D) price and efficiency variances.

E) mix and yield variances.

6) The direct materials mix variance will be favourable when

A) the flexible-budget contribution margin is greater than the actual contribution margin.

B) the actual direct materials input mix is less expensive than the budgeted direct materials input mix.

C) the actual quantity of total inputs used is greater than the flexible budget for total inputs.

D) actual unit sales are less than budgeted unit sales.

E) the input-efficiency variance is favourable.

7) The materials yield variance will be unfavourable when

A) the flexible-budget contribution margin is greater than the actual contribution margin.

B) the actual direct materials input mix is less expensive than the budgeted direct materials input mix.

C) the input-efficiency variance is favourable.

D) the actual quantity of total inputs used is greater than the flexible budget for total inputs.

E) actual unit sales are less than budgeted unit sales.

8) The direct materials mix variance is the

A) average of the direct materials mix variances for each input.

B) sum of the direct materials mix variances for each input.

C) difference between the direct materials mix variances for each input.

D) multiple of the direct materials mix variances for each input.

E) lesser of the direct materials yield variance and the direct materials efficiency variance.

Use the information below to answer the following question(s).

Jenny’s Condiments makes a specialty mustard for street vendors that is composed of wet ingredients and dry ingredients. Two parts of wet ingredients at a standard cost of $12, and three parts of dry ingredients at a standard cost of $9, are required for every batch. In the first week of July, Jenny produced two hundred thirty batches of mustard using 450 units of wet ingredients and 750 units of dry ingredients.

9) What are the direct materials quantity variances for the wet and dry ingredients respectively?

A) $120 favourable/$540 unfavourable

B) $90 favourable/$720 unfavourable

C) $2,880 favourable/$2,610 unfavourable

D) $120 unfavourable/$540 favourable

E) $90 unfavourable/$720 favourable

10) For the wet ingredients what are the material mix and yield variances respectively?

A) $270 favourable/$180 unfavourable

B) $240 unfavourable/$360 favourable

C) $240 favourable/$360 unfavourable

D) $360 favourable/$240 unfavourable

E) $360 unfavourable/$240 favourable

11) For the dry ingredients what are the material mix and yield variances respectively?

A) $270 favourable/$270 unfavourable

B) $360 unfavourable/$360 unfavourable

C) $360 favourable/$360 unfavourable

D) $360 favourable/$360 favourable

E) $270 unfavourable/$270 unfavourable