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To produce 19 litres of product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.
Chemical A has a standard cost of $20 per litre and chemical B has a standard cost of $25 per litre.
During September, the actual results showed that 1,850 litres of product X were produced, using a total input of 900 litres of chemical A and 1,100 litres of chemical B.
The actual costs of chemicals A and B were at the standard cost of $20 and $25 per litre respectively.
Answers
both favouable
both adverse
mix favourable yield adverse
yield fovurable mix adversesir i got actual total yield to be 1850X how come it is 2000 when its given in the question 1850 of X while calculating mix variance ? and in yield variance actual output is 1850 and we should get yield of 1900 ((2000*19)\20) so its yield adverse why is it the other way round in marking scheme . also its odd when 20 input produces 19 output how come ? in your lecture it was nothing like above all input added up to an output (like A1 + B2 = 3X) unlike the above question can you explain why ?
thankyou
The actual yield is not 2,000 – it is 1,850.
For the mix variance we take the actual total input which is 900 + 1,100 = 2,000, and compare the actual mix (900 and 1,100) with the standard mix (which should be 8 and 12 for every 20 litres input). For the mix variance we are not interested in whether or not the yield was as it should be (that is looked at in the yield variance). We are only looking at how the input was mixed between the two materials.
in marking scheme for yield it is AQSM = 2000 and SQSM = 1947 ?? this question is bpp page 326 question 5 . also how is he calculating 1947 for standard quatity at standard mix ?
From the standard cost card, for every 19 litres produced they should be inputting 8 + 12 = 20 litres.
Therefore for actual production of 1,850 litres they should have been inputting 20/19 x 1,850 = 1,947 litres.
Have you watched my free lectures on mix and yield variances?
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