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Hi John,
A chemical flavouring, product C is made by mixing two materials together:
Standard – Kg per batch – $ per kg – $ per batch
L – 300 – $1.30 – 390
H – 500 – $2.82 – 1,410Input per batch 800kg
10% standard loss 80kg
Output per batch 720kg
For batch 1247 input as 250.5kg of L and 669.5kg of H. Output from the batch was 810kg of product C.
They have have worked the standard cost per kg as £2.50 – how?
From the standard cost card, the total cost is $1800 (390 + 1410) for total output of 720 kg.
Therefore the standard cost per kg = 1800/720 = $2.50.
I do suggest that you watch my free lectures on mix and yield variances. The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
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