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- September 3, 2021 at 8:48 am #634104
Hello sir

I was doing the September 2018 PM question (Kappa co)

I am having challenges calculating the material yield variance, especially on how to get the standard quantity in standard mix. I am able to calculate the actual quantity in standard mix, and i know i use the standard costson my understanding, my thought process was this:

An output of 100kg of Omega requires 120 kgs, that 40, 60 and 20 of alpha, beta, gamma respectively. thus an input of 120 is expected to produce an output of 100, meaning a loss of 20%

Then i said 4600 kg actually produced divided by 80% output, is 5750. this 5750 i took as my standard quantity. To get the SQSM I then said 40/120* 5750 , 60/120*5750 and 20/120*5750 getting 1917, 2875 and 958 respectively. However the solution I am looking at is giving 1840, 2760 and 920 respectively.I do not know where i went wrong.

please assist

ThanksSeptember 3, 2021 at 11:15 am #634123Your mistake is using 80% (the loss is not 20% but is 20/120).

The actual output is 4,600. The input should be 120kg for every 100kg of output and so the input should be 120/100 x 4,600 = 5,520 kg

At standard mix, this should be split as follows. Alpha: 40/120 x 5,520 = 1,840; Beta: 60/120 x 5,520 = 2,760; and Gamma: 20/120 x 5,520 = 920.

September 6, 2021 at 4:06 am #634520well explained. it is clear now. thank you

September 6, 2021 at 8:14 am #634535You are welcome 🙂

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