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Financial performance task 1.5 in the practice assessment 1

Hi Guys
Can anyone help me please? I'm doing task 1.5 in the practice assessment 1 paper about indexing numbers.
Does anyone know how do it please?

Thanks in advance!! :)

Comments

  • abd-ellahiabd-ellahi Registered Posts: 12
    Do you still need help on that question ? If so could you inbox me your email and I will get back to with a picture showing how you get to the answer ?
  • jazzies123jazzies123 Registered Posts: 8
    the answer to 1.5 on paper 2 would be great!!
  • titititi Registered Posts: 8
    I am stuck on financial performance assessment 1 task 5 Question C,D,E could you please kindly show the workings, Thanks in advance
  • SandyHoodSandyHood Font Of All Knowledge Registered, Moderator Posts: 2,034
    I would be happy to help.
    I do not have access to the practice papers. So I would need someone who can access them to take a copy of the questions. You can post it here or attach it to an email.
    [email protected]
    Sandy
    [email protected]
    www.sandyhood.com
  • KellyMKellyM Registered Posts: 3
    Hi, if anybody can still help with this question that would be great, thank you!!

    Keta operates a standard costing system & uses raw material C2X which is a global commodity. The standard price was set based upon a market price of £450 per litre when the material price index for C2X was 120.50. The following information has been gathered:

    -the price index increased to 126.525 in June X3
    -the raw material price variance for June was £375,000 adverse
    -12,500 litres of material C2X were purchased in June

    a) The part of the variance explained by the increase in the price index is......
    b) The part of the variance not explained by the increase in the price index is......
  • KkadijatKkadijat Registered Posts: 28
    HI

    First Find the new price for the increased price index in June
    £450/120.50*126.525 = £472.50

    THE PART OF THE VARIANCE EXPLAINED.
    (12500litres* £450) - (12500litres*£472.50)
    £450* 12500 litres = 5625000
    £472.50*12500 litres=5906250. the difference between the two figures £218250 is THE PART OF THE VARIANCE EXPLAINED.

    THE PART OF THE VARIANCE NOT EXPLAINED.
    £450*12500LITRES + 375000(ADVERSE PRICE VARIANCE) - $472.50*12500=
    6000000-5906250 =93750

    126.525-120.50/120.50*100
    126.525-120.50=6.025. 6.025/120.50= 0.05. 0.05*100 = 5%
    KellyM
  • KellyMKellyM Registered Posts: 3
    Thank you so much!! :)
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