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please help with the standard total Usage to calculate the yield Variance per your lecture format.
B Ltd mixes 3 materials to produce 100kg of Chemical SGR. standard Cost card shows the materials to be used in production
Materia A 50 @ $10 per kg
Material B 40 @ $5 per kg
Material C 20 @ $9 per kg
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110kg
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During october 23180kg of SGR were produced using the following materials A 13200kg, B 7200kg C 5600kgFor the actual output of 23,180, the standard input at standard mix is as follows:
A 50/100 x 23,180 = 11,590
B 40/100 x 23,180 = 9,272
C 20/100 x 23,180 = 4,636Sir, I cant understand why you used above proportions.. beacause total of those fractions will be (110/100) normally total must be (100/100). In this example to get Std qty * Std mix why dont we use following fractions;
A 50/110
B 40/110
C 60/110Or cant we assume that there is a normall loss ?
The question says that for every 100kg produced we should be inputting 50kg of A, 40kg of B and 60kg of C. The remaining 10kg is the standard loss (and doing this is the whole point of calculating the yield variance).
My free lectures on mix and yield variances will help you. (The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.)
Sir, I was asking about this problem before, but it seems my message didn’t reach. I was trying to solve this problem using your method. Please confirm is my calculations right. STD MIX (act total) 26400-STD COST 211155-STD MIX (act usage 23180 but in proportion you gave above, the total will be 25498) – STD COST 203984. ANSWER- 7216 (A)
Hello sir.
Referring to the same qn above (of B Ltd).
The standard input at standard mix you provided:
A- 11590
B- 9372
C- 4636
This is fine with me.
But my qn is when I calculate variances for each and after multiplying respective standard prices ($10 for A, $5 for B and $9 for C),the total material yield variance I’m getting is 6716.
Please help.
Thank you.I do suggest that you watch my free lectures on this because I work through an example in great detail.
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