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- This topic has 4 replies, 2 voices, and was last updated 6 years ago by John Moffat.
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- November 18, 2017 at 12:50 pm #416436
To produce 19 literes of product x, standard input mix of 8 literes of chemical A and 12 literes of chemical B is required. Chemical A has a standard cost of $20 per liter and chemical B has a standard cost of $25 per liter.
During September, the actual results showed that 1,850literes of product x were produced, using a total input of 900literes of chemical A and 1,100 literes of chemical B.
The actual costs of chemical A and B were at the standard cost of $20 and $25 per liter respectively.
based on these information, which of the following statement is trueA both variances were adverse
B both variances were favorable
C The total mix variance was adverse and the total yield variance was favorable
D Total mix variance was favorable and total yield variance was adverseAnswer (D) but i did not know how they arrive at the figures with which they got this answwer .
AQSM of A 800 and for B was 1200 making total of 2000 for the material mix
Yield variance SQSM for A it was 779 and for B 1,168 making total of 1,947I can calculate AQSM and AQAM but those above is my challenge , could you please, assisst on this?
Thanks in advance
November 18, 2017 at 1:23 pm #416443sir ignore material mix variance i got the calcualtions , please, assist on yield variance
November 18, 2017 at 7:45 pm #416497There is no need to do lots of workings in order to answer the question. (You would not have the time in the exam anyway 🙂 )
From the standard cost card, for every 20 litres of total input, they should get 19 litres of output.
The actual total input was 2,000 litres (900 + 1100) and so they should get output of 19/20 x 2000 = 1900 litres.
The actual output was only 1850 litres and so the yield variance is adverse.
November 18, 2017 at 9:08 pm #416517Thank you very much sir … That is why you are my master.
November 19, 2017 at 9:43 am #416580You are welcome 🙂
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