ACC- As a rising cost analyst at ACNE Chemical Company

$18.00

Description

As a rising cost analyst at ACNE Chemical Company, the CEO reached out to you for advice. ACNE Chemical continues to face increased competition from manufacturers in China. In an effort to understand and streamline costs, the CEO has asked you to compile cost data for a key product line in its Liquid segment, Radiance Chemical. The standard batch to manufacture 500 liters of Radiance Chemical is as follows:
RADIANCE CHEMICAL
Raw Materials
Quantity (in liters)
Cost
(per liter)
Total Cost
Attanine
100
$2.00
$200
Battanine
300
$0.75
$225
Cattanine
225
$1.00
$225
TOTAL
625
$650
The raw materials are highly flammable. There is 20% loss in the liquid volume during the manufacturing process. The finished bottle is put in 10 liter bottles for sale. Accordingly, the cost per bottle is $13.00 { [$650/500] x 10 liters}
With demand running high, ACNE manufactured 4,000 bottles (40,000 liters) of Radiance Chemical in 2012. Materials used for the production of the 4,000 bottles included:
RADIANCE CHEMICAL
Raw Materials
Quantity
(in liters)
Total Cost
Attanine
8,480
$17,384
Battanine
25,200
$17,640
Cattanine
18,540
$16,686
TOTAL
52,220
$51,710
Problem Statement
1. Please calculate the total raw material variance for Radiance Chemical. Additionally, derive:
a. Material Price Variance
b. Material Mix Variance
c. Material Yield Variance
2. Explain how ACNE Chemical could use each of the three material variances – prices, mix, yield – to help control the cost to manufacture this liquid compound. Assume the following:
Price variance: $2000 Unfavorable

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ACC- As a rising cost analyst at ACNE Chemical Company

$15.00

Description

As a rising cost analyst at ACNE Chemical Company, the CEO reached out to you for advice. ACNE Chemical continues to face increased competition from manufacturers in China. In an effort to understand and streamline costs, the CEO has asked you to compile cost data for a key product line in its Liquid segment, Radiance Chemical. The standard batch to manufacture 500 liters of Radiance Chemical is as follows:
RADIANCE CHEMICAL
Raw Materials
Quantity (in liters)
Cost
(per liter)
Total Cost
Attanine
100
$2.00
$200
Battanine
300
$0.75
$225
Cattanine
225
$1.00
$225
TOTAL
625
$650
The raw materials are highly flammable. There is 20% loss in the liquid volume during the manufacturing process. The finished bottle is put in 10 liter bottles for sale. Accordingly, the cost per bottle is $13.00 { [$650/500] x 10 liters}
With demand running high, ACNE manufactured 4,000 bottles (40,000 liters) of Radiance Chemical in 2012. Materials used for the production of the 4,000 bottles included:
RADIANCE CHEMICAL
Raw Materials
Quantity
(in liters)
Total Cost
Attanine
8,480
$17,384
Battanine
25,200
$17,640
Cattanine
18,540
$16,686
TOTAL
52,220
$51,710
Problem Statement
1. Please calculate the total raw material variance for Radiance Chemical. Additionally, derive:
a. Material Price Variance
b. Material Mix Variance
c. Material Yield Variance
2. Explain how ACNE Chemical could use each of the three material variances – prices, mix, yield – to help control the cost to manufacture this liquid compound. Assume the following:
Price variance: $2000 Unfavorable

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There are no reviews yet.

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ACC- As a rising cost analyst at ACNE Chemical Company

$16.00

Description

As a rising cost analyst at ACNE Chemical Company, the CEO reached out to you for advice. ACNE Chemical continues to face increased competition from manufacturers in China. In an effort to understand and streamline costs, the CEO has asked you to compile cost data for a key product line in its Liquid segment, Radiance Chemical. The standard batch to manufacture 500 liters of Radiance Chemical is as follows:
RADIANCE CHEMICAL
Raw Materials
Quantity (in liters)
Cost
(per liter)
Total Cost
Attanine
100
$2.00
$200
Battanine
300
$0.75
$225
Cattanine
225
$1.00
$225
TOTAL
625
$650
The raw materials are highly flammable. There is 20% loss in the liquid volume during the manufacturing process. The finished bottle is put in 10 liter bottles for sale. Accordingly, the cost per bottle is $13.00 { [$650/500] x 10 liters}
With demand running high, ACNE manufactured 4,000 bottles (40,000 liters) of Radiance Chemical in 2012. Materials used for the production of the 4,000 bottles included:
RADIANCE CHEMICAL
Raw Materials
Quantity
(in liters)
Total Cost
Attanine
8,480
$17,384
Battanine
25,200
$17,640
Cattanine
18,540
$16,686
TOTAL
52,220
$51,710
Problem Statement
1. Please calculate the total raw material variance for Radiance Chemical. Additionally, derive:
a. Material Price Variance
b. Material Mix Variance
c. Material Yield Variance
2. Explain how ACNE Chemical could use each of the three material variances – prices, mix, yield – to help control the cost to manufacture this liquid compound. Assume the following:
Price variance: $2000 Unfavorable

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There are no reviews yet.

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