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Hi John!
I actually do have watched your lectures but have some issue about yield variances.
From your explanations, I have some issues to understand why or how a favourable mix variance could result from a adverse yield variance? Could you please explain?
Thanks.
It is actually more likely to be the other way round!!
Suppose you use two materials – one is very good but is expensive, the other is not so good but is cheap.
If you buy more of the cheap one (and therefore less of the expensive one) then you will have a favourable mix variance – it will be saving money.
However, buying more of the cheap one might mean that you end up wasting more (because it is not so good) – so you would have an adverse yield variance.
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