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53 The finance director of Paint Mixers Ltd has produced the table below showing the variance
results for the first three months of the year:
January February March
Material price variance $3,000 A $2,000 A $1,000 A
Material mix variance $2,000 A $750 A $100 F
Material yield variance $4,000 A $2,000 A $50F
Which of the following interpretations of the variances analysis exercise above is NOT
correct?
A The purchasing manager should be able to threaten to switch suppliers to get better
deals and address the adverse material price variance
B The materials mix variance is entirely under the control of the production manager
C The favourable yield variance in March could be the result of operational efficiency
D The responsibility for the initial poor performance must be borne by both the
purchasing manager and the production managerthe answer is D in kaplan exam kit
hello tutor
I would like to know why is it “D”I mean both are responsible for poor performance isn’t it?
the purchasing manager probably bought cheaper materials and which resulted poor performance and so on?or is it the other way around?
Assuming that you have copied the whole of the question correctly (I cannot check because I only have the BPP Revision Kit, not the Kaplan Kit), then I agree with you and it seems that Kaplan’s answer is wrong.
The price variance is under the control of the purchasing manager, and the mix & yield variances are under the control of the production manager. Given that all were adverse initially, then both have responsibility.
(However, one thing you have written is not true. You have written that the purchasing manager probably bought cheaper materials. However, since the price variance is adverse then they certainly paid more for the materials!!)
Thank you very much tutor.
well I have found few questions which gives confusing answers and I have strong doubt on this. I am still doubtful if such questions comes on real ACCA exam and if it is computer checked then we might miss out 2 marks easily isn’t it ?
Yes I agree, I realised it later. ( for the mistake)
Do not worry with regard to the real exam. Questions in the real exam are checked many times before they are allowed to appear in the exam.
Also, the computer produces for the ACCA statistics as to what choices students made, so if ever a ‘bad’ question does get through to the exam (which is very unlikely) then the computer will spot that there is a problem, and the ACCA will adjust the marking accordingly.
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