Question 1

**Section B - Case 2: BioGrow Agriculture**

BioGrow is an agricultural company producing a premium organic fertilizer. The standard material mix for one batch of fertilizer is:
- Material Alpha: 60 kg at $10 per kg
- Material Beta: 40 kg at $15 per kg

During the last month, BioGrow produced several batches. The actual total input was 10,000 kg of material, consisting of:
- 5,500 kg of Material Alpha
- 4,500 kg of Material Beta

Calculate the total material mix variance in dollars. (Enter the numerical value only. Assume the variance is Adverse, do not enter 'A' or 'Adverse')

Accepted Answer

1. Calculate the standard cost of the actual total input (10,000 kg) if it had been mixed in the standard ratio (60:40). 
2. Calculate the standard cost of the actual input in the actual ratio. 
3. The difference is the mix variance.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Using actual prices instead of standard prices, or calculating the yield variance instead.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 4

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