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BPP revision kit sep 2021

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › BPP revision kit sep 2021

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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  • August 6, 2021 at 5:17 am #630531
    jayaswarya
    Member
    • Topics: 8
    • Replies: 4
    • ☆

    Question number 183 page 64 in the practice kit for (sep 2021 exam to june 22)

    Ans given was 700 fav

    I understand the concepts but I am bit confused in the adverse and fav calculations

    Total mat cost=price +usage
    4900A= 4800A+ usage
    Usage = 4900A-4800A
    Usage = 100 A

    Total usage = mix + yield
    100A = 800A+ yield
    Yield= 100A-800A
    Yield =700 A
    I think 700 A but the answer was 700 F can you please help me to get the ans correct

    Thanks

    August 6, 2021 at 10:07 am #630561
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51585
    • ☆☆☆☆☆

    An adverse variance is negative.

    The yield variance = total usage – mix

    So yield = -100 – (-800)

    Subtracting a negative number is the same as adding the number, so:

    yield = -100 + 800 = +700 (and a positive variance is a favourable variance).

    Alternatively, had the yield variance been 700 adverse, then having a mix variance of 100 adverse would mean then when you added the two together you would end up with a total variance of 800 adverse, which obviously is not correct 🙂

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