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In q no 32)
How do we get the figures for material usage variance under should use 1840,2760and 920
And under material mix variance how Do we get the figures ?
For the materials usage variance, on the standard cost card they should be using 40 kg of Alpha for every 100 kg of Omega produced.
They actually produced 4,600 kg of Omega, and therefore they should have used 40/100 x 4,600 = 1,840 kg of Alpha. It is the same workings for the other two ingredients.
For the mix variance, on the standard cost card, for every 120kg of ingredients used they should be using 40kg of Alpha. The actually used 5,620 kg of ingredients and therefore 40/120 x 5,620 = 1,872.33 kg of Alpha. Again, it is the same workings for the other two ingredients.
Have you not watched my free lectures on mix and yield variances, because this is all explained in my lectures? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.