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Hi! Can someone help me understand why in Pan Ocean Chemicals TYU in Kaplan book (TYU3 here – https://kfknowledgebank.kaplan.co.uk/acca/chapter-10-advanced-variances) in the answer when calculating SQSM for yield variance the actual output of 15,408 kg is multiplied by 100/90 if it is the input to which the 10% loss relates not the output? I could not make the SQSM calculation as I do not know the amount of batches required to produce the actual output of 15,408 kg and therefore do not know how much standard materials are required to produce the actual output as the standard inputs are given per batch. Thank you!
Hi Anbve,
As metioned that the loss is during the input process thats why we had done 15408*100/90 to know what exactly was budgeted production (kgs).
Also for SQSM we have been provided with the standard mix so can easily calculate it:
17120*8/16 = S1
17120*5/16 = S2 etc etc..
hope that explains itThank you for your response! I am still struggling to understand this for some reason. Why is the 17 120 kg’s divided between materials if it is the output quantity? I need to know the input quantity, which takes into account the 10% loss and then divide it between inputs based on standard mix (8/16, 5/16, etc.). Why is 17 120 kg’s considered as the total input amount, which takes into account the 10% loss if input amounts actually could be different?
Thank you for your response! I am still struggling to understand this for some reason. Why is the 17 120 kg’s divided between materials if it is the output quantity? I need to know the input quantity, which takes into account the 10% loss and then divide it between inputs based on standard mix (8/16, 5/16, etc.). Why is 17 120 kg’s considered as the total input amount, which takes into account the 10% loss if input amounts actually could be different?
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