Direct Labor Mix and Yield Variances Delano Company uses two types of direct lab

Question

Direct Labor Mix and Yield Variances Delano Company uses two types of direct labor for the manufacturing of its products: fabricating and assembly. Delano has developed the following standard mix for direct labor, where output is measured in number of circuit boards. Standard Direct Labor Type Fabricating Assembly SP $20 12 Mix Cost $40 36 $76 2 hrs. Total 5 hrs Yield During the second week in April, Delano produced the following results: Direct Labor Fabricating Assembly 25 units Type Actual Mix 20,000 hrs. 45,000 65,000 hrs. Total Yield 320,000 units

Explanation / Answer

Answer is $48000 Favorable

= [Actual Mix - Standard Mix) x Standard Price

A B (a-b) Standared Actual Mix Difference SR 26000 20000 6000 20 120000 39000 45000 -6000 12 -72000 Labor Mix variance 48000

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