- March 6, 2021 at 11:04 am #613735wilderMember
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Sometimes there is expected loss in the production process.
Coope and Sorcerer Co make product T42 in a continuous process, for which standard and actual quantities in month 10 were as follows.
Qty—–Std$/kg – value—Quantity kg — actual price/kg–std cost of actual usg
Material P 40000 — 2.50 –100,000–34000———–2.50——————85000
Material Q 20000— 4.00 —80000—- 22000 ———4.00 ————— 88000
Losses occur at an even rate during the processing operations and are expected to be 10% of materials input.
So budgeted output for the month was 54000 of t42 (=60,000 * 90%). Actual output during the month
was 51,300 kg of T42.
Req = calculate the usage, mix and yield variance.
standard usage for actual output of 51,300 kg
Material P 38000 (51300/54000) * 40000 = 38000kg
Material Q 19000 (51300/54000) * 20000 = 19000 kg
Is there an alternative “easy” way of arriving to the above figures (38000 and 19000) ?
(please note the above working is part of the solution for usage variances)March 6, 2021 at 4:15 pm #613777John MoffatKeymaster
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I find the most. logical way it to do it the way I work through in 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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