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Which of the following statements is/are true regarding the materials yield variance?
(1) An adverse total yield variance would suggest that less output has been achieved for a given input, i.e. that the total input in volume is more than expected for the output achieved.
(2) A favourable total mix variance will usually result in an adverse material yield variance.
A (1) only
B Both (1) and (2)
C (2) only
D Neither (1) nor (2)The answer at back of exam kit is B.
Can you explain me how second statement is correct? I have read entire book and your notes but could not find any relation between material mix and material yield variance.
Like material mix variance tells us that we have been distracted from standard ratio of mixture so the variance depends on mix. Yield variance tell that how much units we made compared to units we could have made if we have used an standard ratio.
Thank you.There can be a relationship between the two.
A favourable mix variance means that they are using less of the more expensive materials and more of the cheaper materials.
This is likely to result in poorer quality of what is produced which can mean more waste and therefore less yield.
(Incidentally, you write that you have read our notes, but reading them is pointless unless you are also watching the lectures that work through the notes. They are only lecture notes and it is in the lectures that I explain and expand on the notes.)
Yes. I try to watch if I am unclear because I am short of time. Otherwise your lectures are best.
Thank you for your answer.
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