SOLUTION EXHIBIT 7-28
Columnar Presentation of Direct Materials Efficiency, Yield, and Mix Variances
for The Energy Products Company for August 2015
Flexible Budget:
Budgeted Total Quantity of
Actual Total Quantity
Actual Total Quantity
All Inputs Allowed for
of All Inputs Used
of All Inputs Used
Actual Output Achieved
Actual Input Mix
Budgeted Input Mix
Budgeted Input Mix
Budgeted Rate
Budgeted Rate
Budgeted Rate

(1)
(2)
(3)
Echol
86,000 0.28 $0.22 =
$5,298 86,000 0.30 $0.22=
$5,676 84,000 0.30 $0.22
=
$5,544
Protex
86,000 0.18 $0.47 =
7,276
86,000 0.20 $0.47 = 8,084
84,000 0.20 $0.47
=
7,896
Benz
86,000 0.42 $0.17
= 6,140
86,000 0.40 $0.17
=
5,848
84,000 0.40
$0.17
=
5,712
CT-40
86,000 0.12 $0.32 =
3,302
86,000 0.10 $0.32 =
2,752
84,000 0.10 $0.32
=
2,688
$22,016
$22,360
$21,840
$344 F
$520 U
Total mix variance
Total yield variance
$176 U
Total efficiency variance
F = favourable effect on operating income; U = unfavourable effect on operating income
7-29
(35 min.)
Direct materials rate, efficiency, mix, and yield variances.
1.
Solution Exhibit 7-29A presents the total rate variance ($3,100 F), the total efficiency variance
($2,760 U), and the total flexible-budget variance ($340 F).
Total direct materials rate variance can also be computed as:
Tolman =
($0.30 – $0.32)
62,000
=
$1,240 F
Golden Delicious
=
($0.28 – $0.28) 155,000
=
0
Ribston =
($0.22 – $0.24)
93,000
=
1,860 F
Total direct materials rate variance
$3,100 F

SOLUTION EXHIBIT 7-29A
Columnar Presentation of Direct Materials Price and Efficiency Variances
for Niagara Inc. for November 2015
Flexible Budget:
Actual Costs
(Budgeted Inputs
Incurred
Allowed for Actual
(Actual Inputs
Actual Input
Outputs Achieved
Actual Rates)
Budgeted Rates
Budgeted Rates)
(1)
(2)
(3)
Tolman 62,000 $0.30 =
$18,600
62,000 $0.32 = $19,840
45,000 $0.32 = $14,400
Golden Delicious
155,000 $0.28 =
43,400
155,000 $0.28 =
43,400
180,000 $0.28
=
50,400
Ribston
93,000 $0.22 =
20,460
93,000 $0.24 =
22,320
75,000 $0.24 =
18,000
$82,460
$85,560
$82,800
$3,100 F
$2,760 U
Total rate variance
Total efficiency variance
$340 F
Total flexible-budget variance