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question:
mix variances should be calculated whenever a standard product contains two or more direct materials.is the following statement true or not?
answer : falsemix variances should only be calculated when a product contains two or more materials that can be mixed together in different proportions. For example, calculating a mix variance for the production of a bicycle out of its component parts would be meaningless.
i dont understand why the answer is falses isnt “mix variances should only be calculated when a product contains two or more materials that can be mixed together in different proportions” the same as what the question is? apart from the direct materials. And also i dont understand the example it provides with. question is from bpp 210
Mix variances should be calculated whenever a standard product contains two or more direct materials.
So when there is more than one input material, the material usage variance can be split into material mix and yield variances.
When we talk about the materials ‘mix’ we are referring to the quantity of each material that is used to make our product – ie we are referring to our inputs.It is only appropriate to calculate and interpret material mix and yield variances if quantities in the standard mix can be varied.
A further complication is that mix variances for individual materials are inter-related and so an explanation of the increased use of one material cannot be separated from an explanation of the decreased use of another.
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