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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Mix & Yield Variances
Please help me to understand the calculation of the SQSM in the question below:
“To produce 19litres of product X, a std input mix of 8ltrs of A & 12ltrs of B is required. Std cost of A is $20/ltr; std cost of B id $25/ltr. During September, the actual results showed that 1,850 ltrs of X was produced using a total input of 900 ltrs of A & 1,100 ltrs of B. The actual costs for A & B remains the std costs $20 & $25, respectively.”
Part of the solution has it that:
Yield Variance
Material SQSM AQSM DIFF STD COST VARIANCE
A 779 900 100A 20 2000A
B 1168 1200 100F 25 2500F
1947 2000 1220A
1850 ltrs of output should use 1947 ltrs of input (1850/0.95)
How to calculate the variances is all explained, with examples, in my free lectures.
The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well,