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San Beda University

College of Arts and Sciences


Department of Accountancy
Managerial Accounting – Part 2

Mix and Yield, and Gross Profit Analysis M. B. GUIA

Problem 1: Butliness also does a ‘deep pan cheesy and tomato pizza’ on one of its counters, the
standard or budget cost and usage of the topping ingredients for one pizza are as follows
0.6kg Tomatoes @ P1.40/kg 0.84
0.6kg Cheese @ P7.50/kg 4.50
TOTAL 5.34
1.2kg ingredients will produce or yield a 1kg pizza (due to evaporation in the cooking process). On a
Wednesday afternoon 60 pizzas were cooked (to the weight specified of 1.0 kg) and the following
ingredients were used during the process;
Tomatoes 28 kg P45.00
Cheese 40kg 270.00
Required: Calculate the material price usage, mix and yield variances for Butliness for this day.

Problem 2: A company’s standard direct labor rates in effect for the fiscal year ending June 30 and
standard hours allowed for the output in April are
Standard DL Rate/hr. Standard DLH Allowed
Labor Class III P 8.00 500
Labor Class II P 7.00 500
Labor Class I P 5.00 500
The wage rate for each labor class increased on January 1 under the terms of a new union contract. The
standard wage rates were not revised. The actual direct labor hours (DLH) and the actual direct labor
rates for April were as follows:
Actual Rate/hr. Actual DLH
Labor Class III P 8.50 550
Labor Class II P 7.50 650
Labor Class I P 5.40 375
Required: Calculate the labor rate and usage, mix and yield variances.

Problem 3: Maryville Company uses three different types of chemicals in manufacturing a deluxe brand
of lawn fertiliser. The standard amount of Chemicals X, Y and Z used in manufacturing a 20-kg. bag of
lawn fertiliser is 5 kg., 7 kg. and 8 kg., respectively. The budgeted purchase prices of Chemicals X, Y and Z
are $1.00 per kg., $0.40 per kg. and $0.20 per kg., respectively. Operating data for 20,000 bags of lawn
fertiliser produced in May are as follows:
Actual input quantity Actual input price
Chemical X 97,900 kg. $1.05
Chemical Y 132,000 kg. $0.36
Chemical Z 210,100 kg. $0.18
Required: Calculate the material price usage, mix and yield variances.

Problem 4: Batangas Company produces a compound by mixing 3 gallons of AB-5 (costing $2.25 per
gallon) and 4 gallons of CR-3 (costing $7.50 per gallon). The output is 5 gallons of the compound. During
August, 21,000 gallons of AB-5, costing $46,500, were purchased and used; 26,000 gallons of CR-3,
costing $198,000, were purchased and used. A total of 37,000 gallons of output were obtained.
Required: Calculate the total direct material variance, usage and price variance, and the direct material
mix and yield variance.

Problem 5: The following was the composition of workers in a factory during a particular month, in one
of the production departments. The standard composition of workers and wage rates per hour were as
follows.
Skilled: Two workers at a standard rate of P20 per hour each
Semi-Skilled: Four workers at a standard rate of P12 per hour each
Unskilled: Four workers at a standard rate of P8 per hour each.
The standard output of the gang was four units per hour of the product. During the month in question,
however the actual composition of the workers and hourly rates paid were as under
Skilled: 2 workers @ P20 per hour
Semi-Skilled: 3 workers @ P14 per hour
Un-skilled: 5 workers @ P 10 per hour
The workers were engaged for 200 hours during the month, which included 12 hours when no
production was possible due to the machine breakdown. 810 units of the product was recorded as
output of the workers during the month.
Required: Calculate the total direct labor variance, efficiency and rate variance, and the direct labor mix
and yield variance.

Problem 6: The following data were taken from the records of Romblon Corporation for the year ended
December 31, 2017 and 2018.
2018 2017
Units Sold 10,000 12,000
Sales P 260,000 P 250,000
Cost of Sales P 180,000 P 200,000
Gross Profit P 80,000 P 50,000
Required: Perform a Gross Margin Analysis under the (a) Two-way; (b) Three-Way; and (c) Four-way
method.

Problem 7: The income statement of Bulacan Corporation for the years ended December 31, 2017 and
2018 showed the following data:

2017 2018
Sales P 800,000 P 924,000
Cost of Sales 480,000 501,600
Gross Margin 320,000 422,400
Operating Expenses 180,000 220,000
Net Income P 140,000 P 202,400
Additional Data:
Units Sold 80,000 88,000
Unit Selling Price P 10.00 P 10.50
Unit Costs P 6.00 P 5.70
Required: Perform a Gross Margin Analysis under the (a) Two-way; (b) Three-Way; and (c) Four-way
method.
Problem 8: The following income statement data presented by Laguna Corporation for the years ended
December 31, 2017 and 2018:

2017 2018
Sales P 600,000 P 699,600
Cost of Sales 360,000 380,160
Gross Profit P 240,000 P. 319,440
During 2018, the following transpired that affected net sales, cost of sales, which contributed in the
changes in gross margin.
1. Units sold in 2018 was 10% higher than 2017
2. Unit selling price in 2018 was 6% higher than 2017
3. Unit cost in 2018 was 4% lower than 2017
Required: Perform a Gross Margin Analysis under the (a) Two-way; (b) Three-Way; and (c) Four-way
method.

Problem 9: The income data of Escao Company for the year 2018 and 2017 are as follows:

2018 2017 Variance


Sales P276,000 P204,000 P 72,000 favourable
Cost of goods sold 151,800 122,400 29,400 unfavourable
Gross profit P124,200 P 81,600 P. 42,600 favourable

Required:
1. If the sales price in 2018 is appropriately 20% higher than the sales price in 2017, how much is
the (a) Sales Price Variance; and (b) Sales Volume Variance.
2. The number of units increased (decreased) by
3. How much is the (a) cost volume variance and (b) Cost Price Variance
4. The 2018 cost price is higher (lower) than the 2017 cost price by

Problem 10: The following pertains to Cavite Corporation:


2017 2018
Sales P 200,000 P 216,000
Cost of Sales P 150,000 P 189,000
Gross Profit P 50,000 P 27,000
Required: Considering that the company’s selling price per unit decreased by 10%, compute the
following:
1. Sales price and sales volume variance
2. Cost Price and Cost Volume Variance

Problem 11: San Pedro Corporation manufactures three consumer products, Alps, Bets, and Chaps. Sales
and other information related to the said products are as follows:
2016 Units Unit Price Unit Cost Total Sales Cost of Sales
Alps 15,000 P 10 P8 P 150,000 P 120,000
Bets 20,000 8 7 160,000 140,000
Chaps 5,000 6 4.5 30,000 22,500

2017 Units Unit Price Unit Cost Total Sales Cost of Sales
Alps 20,000 P 12 P9 P 240,000 P 180,000
Bets 20,000 9 7.5 180,000 150,000
Chaps 4,000 5 4 20,000 16,000
Based on the above information, an analysis of the gross profit would show the following changes:
Required:
1. The Sales Price factor shows a variance of
2. The Cost Price factor shows a variance of
3. The Quantity factor shows a variance of
4. The Sales-mix factor shows a variance of

Problem 12: Aquatic Manufacturing Corporation, a multiple product company, has the following data
available for gross profit variation analysis
2016 Alps Bets Chaps Total
Sales P 225,000 P 240,000 P 45,000 P 510,000
Cost of Sales 180,000 210,000 33,750 423,750
No. of Units 22,500 30,000 7,500 60,000

2017 Alps Bets Chaps Total


Sales P 360,000 P 270,000 P 30,000 P 660,000
Cost of Sales 270,000 225,000. 24,000 519,000
No. of Units 30,000 30,000 6,000 66,000
Based on the above information, an analysis of the gross profit would show the following changes:
Required:
1. The Sales Price factor shows a variance of
2. The Cost Price factor shows a variance of
3. The Quantity factor shows a variance of
4. The Sales-mix factor shows a variance of