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Moniq says

Hello Sir,

could you please confirm that the Material Usage Variace is 1000 (F)?

Thank you in advance!

This is Example 3, Chapter 3 Mix & Yield Variances

x : 27 000 $ – (5 000*2kg*3$) = 3 000 (F)

y: 17 000 $ – (5 000*1kg*2$) = 2 000 (A)

Total 1000$ (F)

Moniq says

hahaha, watching the lecture till the end, so question solved. Sir, please apologize.

I`m afraid the remaining two day`s I`d better spent with practicing the variances…

Moniq says

So, if I am not mistaken that the alternative method for Usage variance is:

act.usage – variance

9 900kg – 10 000 kg (5000*2 kg) – 100 kg (F) – 300$ (100kg*3$)

5 300kg – 5 000 kg – 300 kg (A) – 600$ (300kg*2$)

This results in 300 adverse.

This only indicates, that exemptions may not really help 🙁

Aulona says

Dear professor,

I am checking the exam kit of Kaplan, example 130 and I see that the proportions (mix) seem to be not correct. The exercise says that STD Cost card shows the materials to be used in producing 100 kg of the products are:

A: 50@10$/kg

B: 40@10$/kg

C: 20 @10$/kg

My calculations: In total, budgeted input is (50+40+20 = 110), there of to me it results that the mix is:

A: 50/110 = 0.45

B: 40/110 = 0.36

C: 20/110 = 0.18;

while referring to the answers at the end of the exam kit, the proportions are different, respectively (50;40;20). How comes? Is my rationale right (even though it seems to be quite simple calculation…..

…and thnx a lot for your lectures. I find them very helpful in understanding the topics. Thnx again.

Aulona says

I found it prof….It is fine. Sorry…..

John Moffat says

OK (but please ask this sort of question in the Ask the Tutor forum in futures, rather than as a comment on a lecture).

ANDREW says

Thanks for another brilliant lecture.

By the way, how would the workings differ if there both actual and standard production loss was included?

John Moffat says

The workings will not change at all.

(In this example, although there is no standard loss, there is an actual loss (they put in more kg that should have been needed for the production) and it is dealt with in the yield variance.)

Norin says

Absolutely brilliant lecture. Everything is now clear to me with regards to variance. Thanks sir 🙂 🙂 🙂

John Moffat says

Thank you for the comment 🙂

Damilola Salu says

WOW! Thank you so much sir. you just made variance so easy for me

John Moffat says

Thank you for the comment 🙂

Pauline says

Hello Sir,

I have a question regarding the exercise 61 DYI in the revision kit.

Would I have the full mark if for the yield variance instead of calculating what should have yielded 8400 litres, Means 8000-7800 = 200 (A) then multiplied by standard cost $2.1 resulting to an adverse variance of $420. I calculated what is the standard mix for 7800 litres, resulting to 8190 then 8400-8190=210 (A) and multiplied by the weighted standard cost of 2 (210/105). I had the same answer $420.

Thanks in advance for your answer.

Regards,

Pauline

John Moffat says

You must ask questions like this in the F5 Ask the Tutor Forum and not as a comment on a lecture. Also, you do not say which Revision Kit you are referring to – there are several!!

However if you got the same answer then that is fine – there is more than one way of getting the answer and it does not matter which way you do it.

Ridwanul says

example 4 says .. calculate the total sales margin variance.. it sells 3 products A,B,C.In the solution they used standard cost p.u to calculate profit of each product for actual sales though each product cost(actual) vary from budgeted cost.

John Moffat says

We have to use standard costs.

Difference in actual costs would be dealt with in the normal cost variances.

Ridwanul says

another question sir..in the solution the budgeted figure is not flexed to actual results to calculate sales margin variance..i can’t understand why ??

John Moffat says

The sales margin variance is the different between actual profit and budget profit (with costs being kept at standard). (Just as is the total sales variance in ‘basic’ Paper F2 variances).

Just as with basic variances it is then analysed into the sales price variance and the sales volume variance. Because there are several products, the volume variance is analyses into sales mix and sale quantity variances.

Ridwanul says

thank u so much sir.. u r d greatest teacher in ACCA ..respect from heart.

John Moffat says

Thank you 🙂

Ridwanul says

sir there is no lecture on example 4 of course note..and i failed to get d solution given on d note 🙁

John Moffat says

No – there is no lecture at the moment.

saeedurkoo says

Thank you soo much

John Moffat says

You are welcome 🙂

Jide says

Hello Mr John Moffat,

Thank you for your response. What about sales volume planning and operational variances? is that the same logic as materials as well?

John Moffat says

Yes – it is the same logic.

I will probably add a lecture when I have the time, but it is the same logic and is less likely to be asked.

Jide says

Hello Mr John Moffat, Thank you for all your videos and effort in helping students and ultimately helping them pass. I have has success using open tuition in the past ans hoping to have continued success in Dec 2015 f5 cuz i find the paper challenging and im nervous.

That being said, I noticed there were videos for just material mix and yield variances and none for Sales Mix and Yield variances as well as Sales Volume Planning and Operational Variances. Please where can i get these vidoes incase i couldnt locate it here on the website. and if not available here, how do i go about it.

Many thanks.

John Moffat says

There is no lecture yet on sales mix. However the logic is the same as materials mix. There is a worked answer to the example at the end of the notes.

Shatha AlGh says

Sir,

As I have been exempted from earlier papers, am not very familiar with the basic variances

my Q is will i need to know them as well for the exam?

or is learning and understanding ( Mix &Yield , Planning & Operating and Advanced Idle time) is enough to go through ?

thanks

John Moffat says

The examiner has said that she will not ask questions just on basic variances.

However, one or two of the basic variances (any one or two!) can be asked as part of a question.

More importantly, to understand the advanced variances it is really necessary to understand the basic variances (because they expand on the basic variances). To an extent you can just learn the rules, but since 50% of the exam is discussion, it is important to understand them as well.

I think you should go through the basic variances first, but don’t worry too much about learning them.

Erica says

Sir, can we use this approach for material usage variance??

material actual usage standard usage

x 9,900kg (5,000u x 2kg) 10,000kg = 100kg

y 5,300kg (5,000u x 1kg) 5,000kg = 300kg

total usage : 400kg x $8

If yes, could you check where did I go wrong in my calculation when finding the material usage variance?

John Moffat says

The total usage is 200kg too much – not 400kg.

The standard cost is $8 per unit, not per kg..

Erica says

how did you get 200kg?

John Moffat says

300 too much of y and 100 too little of x

Erica says

I got the whole picture now. Thanks, Sir 🙂

John Moffat says

You are welcome 🙂

Erica says

Hello Sir.

The answer script for this chapter test, question 4… is B 48,500 (F) or 49,500 (F)?

John Moffat says

Sorry it is a typing error. It is 49500 favourable.

Thank you for spotting it – I till have it corrected.

Bhagat says

Sir, you are a Godsend. Thank you very much for your unconditional dedication to help students face the behemoth known as F5.

Anzor says

Hi, in revision Mock:

A company has budgeted on selling 7000 units of X $30 s.p and 3000 units of Y $40 s.p. Standard contribution 30% of selling price for both product.

They actually sale 8000X and 7000Y

What is the sales mix variance?

49500 (A)

49500 (F)

7500 (A)

7500 (F)

Right answer in your test is 7500 (F)

My calculation:

Budget 7000+3000=10000

8000+7000=15000

70%15000 30%15000

10500 X and 4500 Y

2500 (A)X and 2500 (F)Y

2500*(30-30%)=52500 (A)

2500*(40-30%)=70000 (F)

Total 17500 (F)

Am I wrong?

Thanks in advance

John Moffat says

Yes you are wrong!

You should cost out at standard contribution. Standard contribution for X is 30‰ of 30 (not 30 – 30%)!

aliimranacca007 says

For sale Mix varince thers is budgted sales: A 200 B 100 C 100 and standard mix not given but in solution its A 2/4 B 1/4 and C 1/ 4 how this standard mix com please tell me

John Moffat says

The total budget sales are 400.

A is 200, which is 200/400 (i.e. 2/4) for the total.

Same idea for B and C

aliimranacca007 says

Thank you 🙂

aliimranacca007 says

20g= 0.02kg

$0.02 per gram means 1 gram value is $0.02 then

1g=0.001 kg

So it should b $0.02 x 0.001 but why it $0.02 x 1000 when transfer to kg

Sakina says

a company has the following standards for a mix to produce 500kg of product C

A= 200KG @ $1 PER KG=$200

B=400KG@ $1.60 PER KG=$640

actual results with output of product C was 600kgs.

A=400KG @ $1 PER KG=$400

B=500KG@ $1.60 PER KG=$800

Calculate the yeild variance

SIR IM CONFUSED!! cld u plz tel me how to calculate ds

John Moffat says

In future, please ask this sort of question in the F5 Ask the ACCA Tutor Forum 🙂

The standard is to input a total of 600kg to get an output of 500kg.

So for an actual output of 600kg there should have been a total input of 600 x 600/500 = 720kg,

So cost out the actual total input (900kg) at standard mix and standard cost, with the standard total input (720kg) at standard mix and standard cost. The difference is the yield variance.

Sakina says

eeeeeee thankyu sir! 🙂 sorry was a bit too excited so posted it here! haha 🙂

Slav says

Dear John,

I believe that someone asked this question but I did not see an answer. Which lecture covers sales mix variance?

John Moffat says

There is no lecture on sales mix variances (but there is an example in the course notes with an answer at the back).

Noreen says

Dear John,

I have reviewed the question on sales mix variance, however I have one question, how were the proportions assigned to A(2/4) , B(1/4) and C(1/4) in Example 4?

Please clarify. Thank you

John Moffat says

In the same mix as the budgeted sales.

Product A was budgeted at 200 units out of a total of 400 units, and similarly for the others.

wilson12345 says

question no 4 in mix variance, is it correct if i get the below answers?

sales margin variance= 2180(f)

price variance=770(a)

sales mix variance=575(f)

sales quantity variance=2375(f)

John Moffat says

If you mean example 4 in the chapter, then the correct answer is that shown in the lecture (and also typed at the back of the Course Notes)

AUWAL says

Hello sir, kindly assist me with labour idle time variance formula? thanks.

sampatheym says

very well explained

thank you so much………………..

williette says

thanks for the lectures opnentuition,

how do we calculate the yield variance when there is a loss

John Moffat says

The calculation is exactly as in the lecture example.

k2nike says

Dear sir i have a doubt. 15200 kg should be the total units used. Why have you taken it as the yield. Shouldn’t the actual yield be 500 units?

John Moffat says

I have not taken 15,200 as the yield.

The actual yield was 5,000 units and this should have required 15000 kg.

tauraiversatile says

Beautiful

riteshrajk says

Sir, where are the lectures for sales mix variance and sales quantity variance?

mashdu93 says

your lectures are juz simple and awesome!! 😀

btw sir, do u have lecture on topic “make or buy decision making “???

latoyah says

hi John, can you work the 2006 Simply Soup” mix and yeild variance question. i seem to be stuck getting back the examiners answer.

thanks

latoyah says

I finally got it, went back over the question and worked it through and finally figured it out. persistence is the key

florencenkrumah28 says

so good. Keep it up and God bless you.

nosheenwahid says

v good lectures

butoy1 says

this lecture is really good, keep up the good work

chiclarence says

nice lecture: hope it will still be free for many more years because they are far more better than the classroom lectures we get here in Africa eventhough we pay for them. sir you mentioned in one of my earlier comments that you have uploaded lectures that work through past exam papers. where can i find these lectures?

John Moffat says

@chiclarence, Thank you for your comments 🙂

(and this website will always be free of charge)

You can find links to lectures working through past exam questions on this page:

http://opentuition.com/acca/f5/acca-f5-revision-notes-and-lectures/

samanthasteinier says

Great lecture

Thanks a lot:)

Miss A.. says

Dear Sir, in the above example you said that we can get more kgs of materials in total even if we have mixed the materials in right proprotion & we have paid the right price.How come ??

John Moffat says

@Miss A.., Its not that we get more kg it is that we have used more kg than we should have done. The reason is that we have maybe wasted some of the materials (which obviously loses us money!).

riannaramrick says

Oh this is great

mixelina89 says

Fantastic – it’s well explained and easy to understand

fa1th1ngod says

thank you!.. all credits go to the good lecturer! he made the yield variance very simple for me to understand! =P

openttc says

thank you very much excellent lectures

simukayi156 says

LECTURES ARE GOOD!!!!!! THEY ACTUALLY EARNED ME A DIPLOMA.!!! I AM SOME WHERE!!!

albshr says

dears is it possible to save the lecture to my hard disk

riannaramrick says

@albshr, No

tameablebunchy says

Thank you OT, excellent job.

maazyalam says

very well explained.

Thanks opentuition…