Hi John,
I am stuck on a question. Please could you assist?
A product has a standard output of 32kg and a standard input of 8kg Input A and 32kg Input B
Input A has a standard cost of $10 per kg
Input B has a standard cost of $20 per kg
The actual output was 6400 kg using 900kg of Input A and 6100kg of Input B.
My answer
Mix Variance - Actual Mix
900 x 10 = 9000
6100 x 20 = 122000
7000kg - 131000
Std mix for total input
(8/40) x 7000) x 10 = 14000
(32/40) x 7000) x 20 = 112000
7000 kg - 126000
5000 adverse
Yield Variance
Std mix for total input
(8/40) x 7000) x 10 = 14000
(32/40) x 7000) x 20 = 112000
7000 kg - 126000
Std total input at std mix
(8/40 x 6400 ) x10 = 12800
(32/40 x 6400 ) x 20 = 102400
6400 kg - 115200
Surely it is 10,800 adverse? Answer is coming up as 18000 favourable
Ask the Tutor ACCA PM
Mix Variance/Yield Variance
5y ago#118,000 favourable is the correct answer.
For every 32 kg output, the input should be 8 kg of A and 32 kg of B.
Therefore for output of 6,400, the input should have been as follows:
(8/32 x 6,400) x $10 = 16,000
(32/32 x 6,400) x $20 = 128,000
So a total of $144,000.
Have you watched my free lectures on mix and yield variances? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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