# Mix and Yield variances with revised material prices

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• #43962

zh0510
Member

How is the Material Mix and Yield variances calculated when there is a revision of material prices?.. is the std price used or revised price used?
thankyou

#60516

John Moffat
Keymaster

If there was a revision, then you would have to calculate planning and operational variances and (possible) split each of them into Price, Mix and Yield.

However there is no way they will ask both in the same question at Paper F5.

#60517

zh0510
Member

i just want to clarify, if theres a revision, and operational and planning variances are asked along with mixed and yield variances, material usage is not required. If so how are the mixed and yield variances calculated? with standard prices or revised prices? or is the usage variance just split up?

Also are the mix and yield variances comprised of operational and planning usage variances?
Thankyou.

#60518

John Moffat
Keymaster

The usage variance is the total of the mix and yield. So if you get a mix and yield question you calculate expenditure variance, mix variance, and yield variance. (If you were ever asked for the usage variance then you just add mix and yield together).

For planning variances you are always comparing revised standard costs with original standard costs. For operational variances you are always comparing actual costs with revised standard costs.
There is no exception to this.

You will NOT get asked in the exam to do both mix and yield, and planning and operational for the same question. It will either be p&o (less likely this time) or m&y (more likely this time) – not both.
(Although the rules above would not change – you would do mix and yield on the planning variance, and mix and yield on the operational variances. It would just be much to messy to be asked.)

#128518

Faran
Participant

This is exactly what was asked in today’s paper.
Sales Operational and Planning Variance in the first part and Sales Mix and Yield in the second.
There was a revision of selling price.
So which price did we have to use?

#128699

John Moffat
Keymaster

When I said they would not be asked in the same question, I meant not both together.
It is fine to ask one in one part, and the other in another part.
I have not seen todays exam paper, and I will not see it until the ACCA publishes it online. As to what price to use – it obviously depends on whether you are calculating a planning variance or an operational variance.

#129122

nizarsalleh
Participant

John, when it says the company using Standard Absorption Costing, so in order to calculate the sales mix variance/sales quantity variance, we multiple it by standard profit or standard contribution?

#129292

John Moffat
Keymaster

If it is absorption costing, then you multiply by standard profit.

#129394

nizarsalleh
Participant

what happened if I multiply it with standard contribution? how much will I lose marks? the total marks for sales mix and quantity is 13 Marks.

#129475

John Moffat
Keymaster

You will lose marks, but I will be surprised if you lose more than 3 marks.
(I say three marks, because it did take some time to calculate the fixed overheads per unit for each of the three products.)

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