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Forums › ACCA Forums › ACCA PM Performance Management Forums › Material mix variance
In Month 5, Romeo Co reported a favourable materials mix variance for the basic
tomato pizza.
Which of the following statements would explain why this variance has occurred?
A The proportion of the relatively expensive ingredients used in production was
less than the standard.
B The prices paid for the ingredients used in the mix were lower than the standard
prices.
C Each pizza used less of all the ingredients in actual production than expected.
D More pizzas were produced than expected given the level of ingredients input
I chose C, however, the correct answer is A as I thought using less of all the ingredients will surely result in favourable mix variance. This statement means all ingredients used (including both expensive and cheap ones) are less than standard. Doesn’t this make more sense than just using less expensive ingredients?
I think C would be yield variance as would D. A is correct for a material mix variance.