Materials Mix And Yield Variances; ACCA Paper F5

Hello.

The following question is from my Kaplan Exam Kit:

JC Ltd mixes three materials to produce chemical SGR. The following extract from a standard cost card shows the materials to be used in producing 100 kg of chemical SG:

Material A: 50 kg @ $10/kg
Material B: 40 kg @ $5/kg
Material C: 20 kg @ $9/kg
Total Kgs: 110

During October 23,180 kg of SGR were produced using the following materials:

Material A: 13,200 kg
Material B: 7,600 kg
Material C: 5,600 kg
Total Kgs: 26,400

Required:
a) What is the total material yield variance?
b) What is the total material mix variance?

The way I answered the question is as follows:

a) Material Yield Variance = SQSP – AQ(Standard Mix)SP

Standard Mix:
Material A: 50kg/110kg = 45%
Material B: 40kg/110kg = 36%
Material C: 20 kg/110kg = 19%

SQSP (A) = (23,180 kg x 100/110) x 45% x $10 = $94,827
SQSP (B) = (23,180 kg x 100/110) x 36% x $5 = $37,931
SQSP (C) = (23,180 kg x 100/110) x 19% x $9 = $36,034
Total = $168,792

AQ(SM)SP (A) = 23,180 kg x 45% x $10 = $104,310
AQ(SM)SP (B) = 23,180 kg x 36% x $5 = $41,724
AQ(SM)SP (C) = 23,180 kg x 19% x $9 = $39,638
Total = $185,672

Material Yield Variance = $168,792 – $185,672 = $16,880 Adv. (And voilà! The correct answer must be $7,216 Adv 🙂 )

b) Material Mix Variance = AQ(SM)SP – AQSP

Total AQ(SM)SP (as above) = $185,672

AQSP (A) = 26,400 kg x $10 = $264,000
AQSP (B) = 26,400 kg x $5 = $132,000
AQSP (C) = 26,400 kg x $9 = $237,600
(it just doesn’t seem right… The answer is $9,200 Adv)

I really, really need help, because I have the feeling that the question is not so difficult, but as you can clearly see, I cannot answer correctly.

Thank you!