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    • The actual sales are 1,400. If they were sold in the same ratio as budget then it would be 700 units of each type of TV.
      Calculate the standard contribution from 700 of each, and compare with the contribution from 590 of each, and the difference is the sales quantity variance.

      (You didn’t ask, but the sales mix variance would be calculated by calculating the standard contribution from 700 of each, and taking the difference for the standard contribution from the actual mix of 750 and 650 units).

      Hope that helps 🙂

      • i do the alternative method where they take the average std contribution per unit. in the rev kit they have done 220×185. they got 185 by doing 190+180/2
        i didnt understand how this calculation

  4. (b) You learn that the wood used to manufacture the trellis sets comprises three types: pine, balsa and redwood. Calculate and comment on the materials mix and yield variances using the information in the table below.
    (8 marks)

    Budget per unit – Nov 2012 Std cost Actual – Nov 2012
    Materials Wood – 25kg @ £3.20/kg 80.00 80,000kgs
    Comprising: Pine – 15kg @ £3.00/kg
    Balsa – 2kg @ £1.50/kg
    Redwood – 8 kg @ £4/kg 45.00
    3.00
    32.00 Pine – 48,000kgs
    Balsa – 6,400kgs
    Redwood – 25,600kgs

      • Hi john, sorry yes I am. I have worked out the mix but keep getting the actual standard mix the same as actual mix which will make the difference 0.

        That’s what I’m not sure about

      • You are correct, and unless you have left something out of the question it means that both the mix and the yield variance are zero!!

        I don’t know where the question came from, but it seems a remarkably silly question (but a very easy 8 marks 🙂 )

      • It’s actually a pass paper for my Uni…

        Is it that the mix had did not interfere with original standard???

        How would I explain this???

        Lol I thought so too that it was a silly question, why I panic. I thought I was doing something wrong. Thanks a million for your reply I really appreciate

      • The mix was in the same proportions as the original standard, so all that you can say is just that!! That there was no change in the standard mix.
        Maybe it could have been better to have more Balsa because it is cheaper and would have saved money, but that could mean that the trellis would not be so good which could lose them money.
        There isn’t really anything else that you could say 🙂

  5. Thanks John,

    in the exam, do we have to write each variance calculation formula first, such as: sales rpice variance= (actual price-standard price) x actual volume? Can we just use the numbers to calculate without writing the formula, any marks are allocated to those formulae?

    • There are no marks specifically allocated to writing down the formulae.

      However it is worth showing a bit of workings because if you make a silly mistake and therefore get the wrong answer, you will still get some marks if it is clear what you are trying to do. If you just write down the answer with no workings at all, and it is wrong, then you get zero (even though it could just be a silly arithmetic mistake).

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