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Hi John,
Sorry to trouble you again…
I thought I had yield question understood from your great explanation in the lectures. I have looked through again and can’t figure out where the answer to Q. 194 is coming from so I must be doing something wrong.
Q:
STD Cost card as follows:
$
white flour 450g @ $1.80 per kg 0.81
wholeG flour 150g @ $2.2 per kg 0.33
Yeast 10g @ $20 per kg 0.2Actual production turned out to be 950 units and the quantities and costs were:
kg $ p kg
White flour 408.5 @ 1.90
Whole G flour 152 @ 2.1
Yeast 10 @20
570.5My workings for the material yield variance:
Actual input at STD MIX:420.86 x 1.8 = 757
140.28 x 2.20 =308
9.35 x 20 = 187
570.50 $1252vs
STD MIX for the Actual output
(950u x 610g i.e: 579.5kg):
427.5 x 1.80 = 769.5
142.5 x 2.2 = 313.5
9.5 x 20 = 190
579.5 1273Subtracting one from the other I am coming up with the incorrect answer of 21 (A)
The answer/solution in BPP Rev kit is 19.77 (f) and it seems to use a different technique. I’m not worried about the other technique but can’t see whatever silly mistake i am making!!!
Any help would be hugely appreciated.
Thanks
BillyI am afraid the problem is one of rounding in your calculations of standard mix at standard cost. It may seem unfair, but the fact that the answer choices were all to the nearest cent you should have worked to the nearest cent. (Although the choice of answers is enough different (19.77 as against 3.30) that even accepting that there is rounding, it would be sensible to choose 19.77 having arrived at a figure with rounding of 21.)
With less rounding, you would get:
white flour: 420.861 x $1.80 = 757.55
Whole flour: 140.287 x $2.20 = 308.63
Yeast: 9.352 x $20 = 187.04Total = 1253.22
Therefore variance = 1273 – 1253.22 = 19.78.
It is favourable, because the the actual total input (570.5) is less than the standard total input (579.5) for the actual production.
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