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Sir one off yield question
There is normal loss of 10%
but in Opentution Lectures i dont find any example of this type
also the ans is given in different format compare to the the format that you taught in lecturesi think reminding of both formats is not good
So i want to know that HOW Normal loss is incurred in the format that you taught in lecturesI try it by including normal loss in (std quan @std mix for actual production @std price)
but unfortunately its gives the wrong ANS..
Also QUestion told total normal loss (not specific about which Material A,B,C is loss relate)
so confused about which materila std cost is used for normal loss..A normal loss makes no difference at all to the rules that I go through in the lectures.
Suppose the standards for every 100 kg of a product it requires 50 kg of material A, 60 kg of material B (so total material of 110kg) but a normal loss of 10% i.e. 10 kg.
Suppose the actual production is 1,500 kg of the product, then they should have used 110 kg for every 100kg produced. So the actual total purchases should have been 110/100 x 1,500 kg = 1,650 kg in total of which 50/100 x 1500 = 682 kg should have been material A, and 60/100 x 1500 = 900 kg should have been material B.
The difference between these quantities (at standard cost) and the actual total quantity (at standard mix and standard cost) is the yield variance.There is no relevant as to which material the loss relates.
How you show your workings is irrelevant – I do it in the way I find most logical and (more importantly) the easiest to remember.
The examiner has not asked a question with normal losses in for many years.
The last one i can remember was set my the previous examiner in June 2009 and was called Crumbly Cakes. If you can find the question, then you can find my lectures working through the answer, linked from the following page:
https://opentuition.com/acca/f5/f5-past-acca-exam-question-3-june-2009-exams/
Sir i watch your lecture on crumbly cakes
you explain this question in much details..
I clearly understand the factthankyou soo much 🙂
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