8.10. Mix and Yield Variances for Material and Labor
Mix refers to the relative proportion of various ingredients of input factors such as materials and labor. Yield is a measure of productivity.
Material and Labor Mix Variances
The material mix variance indicates the impact on material costs of the deviation from the standard mix. The labor mix variance measures the impact of changes in the labor mix on labor costs.
Formulas
Mix and Yield Variances
The material quantity variance is divided into a material mix variance and a material yield variance. The material mix variance measures the impact of the deviation from the standard mix on material costs, while the material yield variance reflects the impact on material costs of the deviation from the standard input material allowed for actual production. We compute the material mix variance by holding the total input units constant at their actual amount.
We compute the material yield variance by holding the mix constant at the standard amount. The computations for labor mix and yield variances are the same as those for materials. If there is no mix, the yield variance is the same as the quantity (or usage) variance.
Formulas
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