Problem A. Sample Corporation uses two materials in the production of their product.

The materials, A and B, have the following standards:

Material Standard Mix Standard Unit Price Standard Cost
A 3,500 units P1.00 per unit P3,500
B 1,500 units 3.00 per unit P4,500
Yield 4,000 units

During January, the following actual production information was provided:

Material Actual Mix
A 30,000 units
B 20,000 units
Yield 36,000 units

1. How much is the materials mix variance?

2. What is the materials yield variance?
3. How much is the usage variance?

Problem B. A company produces a gasoline additive. The standard costs and input for a 500-liter batch of the additive are presented below.
Standard Input- Standard Cost Total
Chemical Quantity in Liters per Liter Cost
Echol 200 $0.200 $ 40.00
Protex 100 0.425 42.50
Benz 250 0.150 37.50
CT-40 50 0.300 15.00
600 $135.00
The quantities purchased and used during the current period are shown below. A total of 140 batches were made during the current period.
Quantity Pur- Total Quantity Used
Chemical chased (Liters) Purchase Price (Liters)
Echol 25,000 $ 5,365 26,600
Protex 13,000 6,240 12,880
Benz 40,000 5,840 37,800
CT-40 7,500 2,220 7,140
85,500 $ 19,665 84,420

1. What is the materials mix variance for the operation? (M)

2.What is the materials yield variance for this operation? (M)

Problem C. The income statement of a trading firm, GPV Corporation for the years 200A and 200B showed the following gross margins on sales.
200A 200B Change
Number of units Sold 10,000 12,000 2,000
Sales revenue P 80,000 P 97,200 17,200
Cost of Sales 50 000 72,000 22,000
Gross Margin P30,000 P 25,200 P (4,800)

Disappointed with the results the results of operations during 200B the owner of the firm has asked for an accounting of the decline in gross margin.

1. The change in gross margin due to the change in units sold is

2. The percentage of change in quantity is
3. The change in gross margin due to the change in unit selling price is
4. The percentage of change in unit selling price is
5. The change in gross margin due to the change in unit cost is
6.T he percentage change in unit cost is
7. The gross margin in period B decreased in spite the increase in units sold because
a. Unit selling price did not change while unit cost increased by 20%.
b. Unit selling price decreased by 1.25% while unit cost increased by 20%.
c. Unit selling price increased by 1.25% while unit cost increased by 20%.
d. Unit selling price increase by 2.125% while unit cost increased by 20%

Problem D. A Corporation, which sells a single product, provided the following data from its income statements for the calendar years, 2006 and 2005:
2006
Sales (150,000 units) P750,000
Cost of goods sold 525,000
Gross profit P225,000
2005 (Base year)
Sales (180,000 units) P720,000
Cost of goods sold 575,000
Gross profit P145,000
1. In an analysis of variation in gross profit between the two years, compute for sales price variance and sales volume variance
2. Compute for cost price and cost volume variance