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Another one- In BPP Question BEDCo how come material usage operational variance is Adverse? As it has ti be only applied on pillow cases.
The material usage operational variance has not only been applied to pillow cases – it applies to sheets as well (the line in the BPP answer saying “this applies to pillow cases only” should not be there, and it is clear in the working that it applies to both sheets and pillow cases.
For sheets, the variance is (248,000 – 240,000) x $5 = $40,000 (adverse)
For pillow cases, the variance is (95,000 – 99,000) x $5 = $20,000 (favourable)
The total is 40,000 – 20,000 = 20,000 adverse
Oh k. Thanks!
You are welcome 🙂