CA Inter P4 · Chapter 12 · Question 6 of 10
The standard mix for a product is material X 60% at ₹20 per kg and material Y 40% at ₹35 per kg. In a period, actual input was 5,000 kg, consisting of 2,800 kg of X and 2,200 kg of Y. The material mix variance is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) ₹3,000 (Adverse)
Explanation
Standard mix of actual input: X = 60% x 5,000 = 3,000 kg; Y = 40% x 5,000 = 2,000 kg. Mix variance = (revised standard quantity - actual quantity) x standard price: X (3,000 - 2,800) x ₹20 = ₹4,000 F; Y (2,000 - 2,200) x ₹35 = ₹7,000 A. Net = ₹3,000 Adverse, because more of the dearer material Y was used.
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