ACCA PM · Chapter 12 · Question 3 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 mix variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $300 adverse
Explanation
Total actual input = 5,000 kg. In standard mix: D 3,000 kg and E 2,000 kg. D: (3,000 - 2,900) x $4 = $400 favourable. E: (2,000 - 2,100) x $7 = $700 adverse. Total mix variance = $300 adverse, because proportionately more of the expensive material E was used.
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