The final question on the paper was for 15 marks and covered material mix and yield variances. Part (a) asked for the calculations for these and was very well answered. It was impressive to see the number of candidates who scored full marks here.

Part b(i) asked for a brief explanation of what each of the variances indicates about production at the company, Safe Soap Co.

Some candidates did not read the question properly and started discussing the manager’s performance. This was not what the question asked so – future candidates – make sure that you always read requirements carefully.

So, for example, as regards the adverse material mix variance, answers should have stated that it shows that the mix of materials used in October was more expensive than the standard mix.

It was surprising to see that many candidates did not know that this is what an adverse materials mix variance shows.

This was similar to some of the responses to question 2, where the calculations were done reasonably well but understanding of what the calculations actually meant was sometimes lacking.

Part b (ii) also proved problematic for a number of candidates. It read ‘discuss whether the sales manager could be justified in claiming that the change in the materials mix has caused an adverse sales volume variance in October.’

The expectation was that candidates would identify the fact that the change in mix could have led to the adverse sales volume variance but it cannot be definitively said that it did.

Many answers tried to make it a black and white matter i.e. yes or no, when in fact the answer was grey.

Quite a few candidates said that the sales manager couldn’t be justified in his claims because a more expensive mix of materials was used and this means sales volumes should go up.

Again, it’s simply not as straight-forward as this. A more expensive mix might be used in production but this doesn’t mean that a product will necessarily be better. In the case of something like soap, adhering to a certain formula is very important.