CAF-5 · Chapter 18 · Question 11 of 20
(Standard Costing: Missing Figures & Yield Variance) A chemical process mixes Material X (Std: 60%, Rs. 20/kg) and Material Y (Std: 40%, Rs. 30/kg). Standard yield is 90% of input. During the period, 10,000 kg were input, producing 8,800 kg of good output. What is the Material Yield Variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Rs. 4,800 Adverse
Explanation
Standard Yield for 10,000 kg input = 9,000 kg. Actual Yield = 8,800 kg. Yield Variance = (8,800 - 9,000) * Std Mix Cost per input kg. Std Mix Cost = (0.6*20 + 0.4*30) = Rs. 24/kg input. Variance = 200 kg * 24 = Rs. 4,800 Adverse.
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