ACCA PM Syllabus D. Budgeting And Control - Material Mix and Yield Variances - Past Papers ^{1 / 4}

What was the materials yield variance for March?

A. $6,800 favourable
B. $6,800 adverse
C. $1,000 favourable
D. $1,000 adverse

To produce 19 litres of Product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.

Chemical A has a standard cost of $20 per litre and chemical B has a standard cost of $25 per litre.

During September, the actual results showed that 1,850 litres of Product X were produced, using a total input of 900 litres of chemical A and 1,100 litres of chemical B.

The actual costs of chemicals A and B were at the standard cost of $20 and $25 per litre respectively.

Based on the above information, which of the following statements is true?

A. Both variances were adverse
B. Both variances were favourable
C. The total mix variance was adverse and the total yield variance was favourable
D. The total mix variance was favourable and the total yield variance was adverse

The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production process begins with workers weighing out ingredients on electronic scales and then placing them in a machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves by hand, after which the bread is then placed into the oven for baking.

All baked loaves are then inspected by OBC’s quality inspector before they are packaged up and made ready for sale.

Any loaves which fail the inspection are donated to a local food bank.

The standard cost card for OBC’s ‘Mixed Bloomer’, one of its most popular loaves, is as follows:

Required:
(a) Calculate the total material mix variance and the total material yield variance for OBC for the last quarter. (7 marks)

The Organic Bread Company (OBC) makes a range of breads for sale direct to the public. The production process begins with workers weighing out ingredients on electronic scales and then placing them in a machine for mixing. A worker then manually removes the mix from the machine and shapes it into loaves by hand, after which the bread is then placed into the oven for baking.

All baked loaves are then inspected by OBC’s quality inspector before they are packaged up and made ready for sale.

Any loaves which fail the inspection are donated to a local food bank.

The standard cost card for OBC’s ‘Mixed Bloomer’, one of its most popular loaves, is as follows:

Required:
(b) Using the information in the question, suggest THREE possible reasons why an ADVERSE MATERIAL YIELD variance could arise at OBC. (3 marks)

The following statements have been made about the materials mix variance for a company manufacturing different products using the same type of material (measured in kgs):

(i) The mix variance can be calculated by taking the difference between the actual quantity in the standard mix and the actual quantity in the actual mix, then multiplying it by the actual cost per kg

(ii) The mix variance arises because there is a difference between what the input should have been for the output achieved and the actual output

Which of the above statements is/are correct?
A. Neither (i) nor (ii)
B. Both (i) and (ii)
C. (i) only
D. (ii) only

To produce 19 litres of product X, a standard input mix of 8 litres of chemical A and 12 litres of chemical B is required.

Chemical A has a standard cost of $20 per litre and chemical B has a standard cost of $25 per litre.

During September, the actual results showed that 1,850 litres of product X were produced, using a total input of 900 litres of chemical A and 1,100 litres of chemical B (2,000 litres in total).

The actual costs of chemicals A and B were at the standard cost of $20 and $25 per litre respectively.

It was expected that an actual input of 2,000 litres would yield an output of 1,900 litres (95%). The actual yield for September was only 1,850 litres, which was 50 litres less than expected.

For the total materials mix variance and total materials yield variance, was there a favourable or adverse result in September?

A. The total mix variance was adverse and the total yield variance was favourable
B. The total mix variance was favourable and the total yield variance was adverse
C. Both variances were adverse
D. Both variances were favourable