ACCA PM · Chapter 12 · Question 4 of 12
Product W is made by mixing two materials. The standard input to produce 9 kg of W is 6 kg of D at $4 per kg and 4 kg of E at $7 per kg. Last month, 2,900 kg of D and 2,100 kg of E were used, and 4,410 kg of W were produced. What is the total materials yield variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $520 adverse
Explanation
Standard cost per kg of input = ((6 x $4) + (4 x $7)) / 10 = $5.20. Standard input for 4,410 kg of output = 4,410 / 9 x 10 = 4,900 kg. Actual input = 5,000 kg. Yield variance = (4,900 - 5,000) x $5.20 = $520 adverse.
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