# F5 Past ACCA Exam Question 1 December 2010 Variances

• says

Thank you John for your help and your easy explanation.. I wish I had a teacher like you!!! Thanks a lot….. Well appreciated

1. says

(b) You learn that the wood used to manufacture the trellis sets comprises three types: pine, balsa and redwood. Calculate and comment on the materials mix and yield variances using the information in the table below.
(8 marks)

Budget per unit – Nov 2012 Std cost Actual – Nov 2012
Materials Wood – 25kg @ £3.20/kg 80.00 80,000kgs
Comprising: Pine – 15kg @ £3.00/kg
Balsa – 2kg @ £1.50/kg
Redwood – 8 kg @ £4/kg 45.00
3.00
32.00 Pine – 48,000kgs
Balsa – 6,400kgs
Redwood – 25,600kgs

• says

Hi john, sorry yes I am. I have worked out the mix but keep getting the actual standard mix the same as actual mix which will make the difference 0.

That’s what I’m not sure about

• says

You are correct, and unless you have left something out of the question it means that both the mix and the yield variance are zero!!

I don’t know where the question came from, but it seems a remarkably silly question (but a very easy 8 marks )

• says

It’s actually a pass paper for my Uni…

Is it that the mix had did not interfere with original standard???

How would I explain this???

Lol I thought so too that it was a silly question, why I panic. I thought I was doing something wrong. Thanks a million for your reply I really appreciate

• says

The mix was in the same proportions as the original standard, so all that you can say is just that!! That there was no change in the standard mix.
Maybe it could have been better to have more Balsa because it is cheaper and would have saved money, but that could mean that the trellis would not be so good which could lose them money.
There isn’t really anything else that you could say

• says

Thks again!!!!

2. says

Thanks John,

in the exam, do we have to write each variance calculation formula first, such as: sales rpice variance= (actual price-standard price) x actual volume? Can we just use the numbers to calculate without writing the formula, any marks are allocated to those formulae?

• says

There are no marks specifically allocated to writing down the formulae.

However it is worth showing a bit of workings because if you make a silly mistake and therefore get the wrong answer, you will still get some marks if it is clear what you are trying to do. If you just write down the answer with no workings at all, and it is wrong, then you get zero (even though it could just be a silly arithmetic mistake).