Forums › ACCA Forums › ACCA PM Performance Management Forums › material yield variance
- This topic has 3 replies, 2 voices, and was last updated 4 years ago by John Moffat.
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- February 15, 2020 at 2:42 am #561889
o produce 19 litres of product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.
Chemical A has a standard cost of $20 per litre and chemical B has a standard cost of $25 per litre.
During September, the actual results showed that 1,850 litres of product X were produced, using a total input of 900 litres of chemical A and 1,100 litres of chemical B (2,000 litres in total).
The actual costs of chemicals A and B were at the standard cost of $20 and $25 per litre respectively.
It was expected that an actual input of 2,000 litres would yield an output of 1,900 litres (95%). The actual yield for September was only 1,850 litres, which was 50 litres less than expected.
For the total materials mix variance and total materials yield variance, was there a favourable or adverse result in September?
A. The total mix variance was adverse and the total yield variance was favourable
B. The total mix variance was favourable and the total yield variance was adverse
C. Both variances were adverse
D. Both variances were favourableI Understand the mix variance but the yield variance the actual total input at std mix at std cost we use 2000 lt but how to find the std total input at std mix for actual output at std cost. It make me confuse everytime even in this question they use 1947 lt .can you help me with this .
Thank you
February 15, 2020 at 10:24 am #561927From the standard cost card, to get output of 19 litres they need to input 20 litres (8 + 12).
Here, the actual output is 1,850 litres and therefore the would have expected to input
20/19 x 1,850 = 1947 litres.However I am puzzled why the answer bothers calculating this because the question as you have typed it does not require any calculations.
Have you watched my free lectures on mix and yield variances? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
February 16, 2020 at 2:07 am #561966Thank you sir
February 16, 2020 at 11:10 am #561994You are welcome 🙂
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