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Dear Mr John,
Can you please advice why the answer given by BPP is favourable?
I think should be adverse as the actual cost incurred for materials $20,800 is higher than the standard cost of $19,552.
Appreciate if you could clear my doubt.
Thank you.Best Regards,
KevinSorry, but I have not yet received my copy of the latest edition of the Revision Kit, and so what you are asking does not refer to Q162 in my revision kit.
If it is a Section C type question then just tell me the name of the question and I will find it. If it is an MCQ, then type out some of the question.
Please find below for the question.
The following cost information relates to product XY which is produced in a continuous process from several different materials.
Actual quantity of materials at standard price $ 19,960.
Actual quantity of materials at actual price $ 23,120.
Actual yield at standard materials cost $ 20,800.
Standard yield from actual input of materials at standard cost $ 19,552.What is the materials yield variance for the period?
Answer given by BPP:
Mix variance (19,552 – 20,800) : $1,248 (F)The answer is correct as favourable.
It is because the actual yield (or output) is higher than was expected (the standard yield or output).
Have you watched my free lecture on mix and field variances? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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