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Hello tutor,
It is most likely that mix and yield variances will examine in decrmber.
In this regard could you briefly note the main reasons of why these variances might be adverse and favourable ?
Thanks a lot.I am wondering how you know that mix and yield variances are most likely in December 🙂
However….the mix variance will be favourable if the company has bought more of the cheaper material and less of the more expensive (and vice vera for adverse).
The yield variance will be favourable if there is less wastage of material (and vice versa for adverse).
Importantly, the two variances may well be inter-related – buying more of the cheaper material (and therefore a favourable mix variance) may well result in more wastage (and therefore an adverse yield variance).
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