PEV again

Christopher Robin

Possibly a bit dumb but I didn't understand the stock in the first question (in fact didn't understand most of the paper). They had 8,500,000 tea bags and produced 8,400,000 tea bags but only had 50,000 closing stock!?? I'd be grateful if anyone can shed any light on this as I can't stop thinking about it?

rjww85

The only reason stock plus units produced wouldn't equal the transfers from stores is due to material wastage. Therefore 50,000 teabags were wasted in the production of 84,000 boxes, this gave you you material teabag useage varience and also I think 1.2 informed us that faulty machines had an effect on the useage of materials.

Hope this helps!

Kris

they produced 8,400,000 teabags using empty 8,450,000 bags.... therefore they had a usage variance of 50,000 bags and closing stock of 50,000 empty bags = 8,500,000

Lizy

I am confused the more. This is not a production question the reason being we were not given the measurement to start with, i.e gram or kg weight to produce 100 bags of tea. In my own opinon this why most students get confused. I tried to divide the unit cost by 100 tea to get the weight.

Cortez

The question was relating to the packing department which packed 1000 tea bags into boxes - knowing how many kg of tea were required to fill the tea bags would have been needed for the bagging department. I think we were told how many tea bags go in the boxes, how much cardboard for the boxes was required, how long they took to pack etc.

8,500,000 tea bags (including the tea as they had already been bagged) were transferred from bagging to packing department. In the packing department these are put into boxes of 1,000 so you'd expect 85,000 boxes. However the question said only 84,000 boxes were packed and there was closing stock of 50,000 tea bags.

84,000 boxes x 1,000 tea bags = 8,400,000 tea bags
+ 50,000 closing stock = 8,450,000 tea bags so there's a difference of 50,000 between this and what was transferred into the department. This is due to wastage.

That's how I understood the question anyway.

Lizy

That sounds more like it. Can't remember if the introduction to the opening text says packing department. That would have help us a lots, may be it does and i missed it - oversight.

Thank you