Question 1

**Section B - Case 2: AeroLogix**

AeroLogix provides drone-based medical delivery. They manufacture their own drone batteries using a mix of Lithium (L) and Cobalt (C). 
The standard mix for one batch of batteries is:
- Lithium: 6 kg at $40 per kg
- Cobalt: 4 kg at $90 per kg

In June, AeroLogix produced 100 batches. The actual materials used were:
- Lithium: 650 kg
- Cobalt: 350 kg

Calculate the total material mix variance for June. (Enter your answer as a positive number for adverse, or negative for favorable. e.g., if it is $100 Adverse, enter 100. If it is $100 Favorable, enter -100).

Accepted Answer

1. Calculate total actual input quantity (650 + 350 = 1000 kg). 2. Calculate the standard mix of this actual total input (60% L, 40% C). 3. Compare Actual Quantity in Standard Mix (AQSM) to Actual Quantity in Actual Mix (AQAM). 4. Multiply the difference by the standard price per kg.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Calculating the yield variance instead of the mix variance, or getting the favorable/adverse sign wrong.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA PM — Performance Management Practice Exam 2

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