ACCA PM · Guided practice (Show me how)
Chapter 14: More variance analysis
Material mix and yield - proportions, then output
The standard material cost per unit of a product is as follows:
| $ | ||
|---|---|---|
| Material X | 2 kg @ $3 per kg | 6 |
| Material Y | 1 kg @ $2 per kg | 2 |
| 8 |
The actual production during the period was 5,000 units and the materials used were: Material X 9,900 kg costing $27,000; Material Y 5,300 kg costing $11,000.
The two materials can be substituted for each other. Calculate the total materials cost variance, the materials price variance, the materials usage variance, the mix variance and the yield variance. Sign convention: favourable = positive, adverse = negative.
(a) Total, price and usage
Calculate the company's total materials cost variance, price variance and usage variance for the period.
(b) Mix and yield
Calculate the quantity of material X in the standard mix of the actual total input, and the materials mix and yield variances for the period.
Opening this exercise…