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Greetings sir,
The question asked if any of the options were an ADVERSE material yield variance, not just material yield variance. The answer at the back answers as if it were only asking about if they were a material yield variance. So what is the real question?Suppose it was adverse material yield variance they were asking,
I wanted to check with you if the following logic is correct for the following choices.1) If the mixture is not taken fully out of the machine, then actual output would be lesser than the output that was expected, thus resulting in an Adverse Material Yield variance. However don’t we have to focus on the actual input to the expected output ? Does that not mean that actual input produced would be counted as less also compared to the expected output because less was taken out, thus resulting in a FAVORABLE material yield variance?
2) Please explain how this results in an ADVERSE Material yield variance.
The wording of the question and the answer are fine.
The yield variance is measuring whether more or less ended up being produced than should have been produced for the amount of materials that went in.
Leaving some of the production in the machine does not change what was input but means than the output from the machine is less than it should have been and is therefore adverse.
1) You mean to say, Yield is about the end production – the bread, and not the input of the mix, which is the middle process. So, if less is taken out, less loaves will eventually be produces, therefore an adverse material yield variance.
2) Whether it has been rejected by the quality inspector or not, how can it be adverse yield variance when the amount did technically get produced – whether the loaves turned out to be sub standard or not and later got rejected by the inspector.
In answer to both of your questions, the yield is always the good production that they end up with.
Whether they leave some in the machine or whether some of the production is thrown away as faulty, the yield is less than it should have been.
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