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Performance Management · Material mix and yield variances

How to Calculate the Material Yield Variance in ACCA PM

Updated 11 October 2026 · Fact-checked

The material yield variance compares the total input actually used with the input the standard allows for the actual output. You value the difference at the standard average cost per unit of input. Less input than allowed is favourable. More input than allowed is adverse. It measures efficiency of conversion, not mix or price.

Understand Calculating the Material Yield Variance

A process turns several materials into one output. The standard says how much input you need for each unit of output. Some input is usually lost through waste, evaporation or spoilage. So 100 kg of input might give only 90 kg of output.

The material yield variance asks one question: did we use more or less total input than we should have for the output we made? It ignores which materials were used. It looks only at the total quantity.

To find it, work out the standard input for actual output. This is actual output divided by the standard yield (output ÷ input). Compare it with the actual total input. The difference is valued at the standard average cost per unit of input. This is the total standard cost of the input mix divided by total standard input units.

The mix variance is the other part of the usage story. Mix looks at the proportions of the materials. Yield looks at the total quantity. Together they equal the total material usage variance. The yield variance is adverse when actual yield is lower than the actual input should have produced.

Key rules to remember

Standard input for actual output
Actual output × (standard input ÷ standard output)
This is the input allowed for what you actually produced. Use the standard loss or yield rate.
Material yield variance (input basis)
(Standard input for actual output − Actual total input) × Standard average cost per unit of input
Positive means favourable. Negative means adverse.
Material yield variance (output basis)
(Actual output − Standard output from actual input) × Standard cost per unit of output
Gives the same answer as the input basis. Use it as a check.
Standard average cost per unit of input
Total standard cost of standard mix ÷ Total standard input units
Use standard prices only. Never use actual prices.
Link to usage variance
Material usage variance = Material mix variance + Material yield variance
Use this to check your working. Price variance is separate.

How to solve Calculating the Material Yield Variance questions

Use this method for any yield variance question. Work in standard prices throughout.

  1. 1Write down the standard mix per batch: quantity and standard price of each material, the total input and the standard output.
  2. 2Calculate the standard average cost per unit of input: total standard cost of the batch ÷ total standard input units.
  3. 3Add up the actual total input across all materials.
  4. 4Calculate the standard input for actual output: actual output × (standard input ÷ standard output).
  5. 5Subtract: standard input for actual output − actual total input. A positive result is favourable. A negative result is adverse.
  6. 6Multiply the difference in units by the standard average cost per unit of input.
  7. 7Label the answer F or A. Check it by the output basis, or by adding it to the mix variance to match the total usage variance.

Quickest way: Total input comparison

When to use it: Use this when the question gives actual input and output and asks only for the yield variance, as in an OT question.

  1. Find the standard input for actual output with one division and one multiplication.
  2. Take away the actual total input.
  3. Multiply by the standard average cost per unit of input. Do not go through each material.
  4. Mark F if you used less input than allowed and A if you used more.
  5. Do a quick sense check: a big loss of output means an adverse variance.

Common mistakes in Calculating the Material Yield Variance

  • Using actual input as the base and forgetting the standard loss.

    Students compare actual input with actual output directly and ignore that the standard allows for normal loss.

    Fix: Always convert actual output to standard input first, using the standard input ÷ standard output ratio.

  • Valuing the variance at the standard price of one material.

    Students think each material has its own yield variance.

    Fix: Yield looks at total input. Use the weighted standard average cost per unit of input.

  • Getting the sign wrong.

    The subtraction can be done in either order, and students do not check against what the result means.

    Fix: Use standard input allowed − actual input. If you used less than allowed, it is favourable. State F or A every time.

  • Mixing up the cost per unit of input with the cost per unit of output.

    Both are standard costs per kg, and the batch cost is shown beside both input and output.

    Fix: Match the base: input difference × cost per input unit, or output difference × cost per output unit. Never cross them.

  • Using actual prices in the calculation.

    The question gives actual costs for the price variance, and students carry them across.

    Fix: Mix and yield are usage variances. Use standard prices only.

  • Confusing mix with yield in the explanation.

    Both come from the same total material usage.

    Fix: Say that mix is about the proportions of materials and yield is about total input against output.

Worked examples

Example 1

A company makes product X. The standard input for one batch is 60 kg of material A at $5 per kg and 40 kg of material B at $10 per kg. A batch gives 90 kg of output. Last month actual output was 4,500 kg. Actual input was 3,100 kg of A and 2,100 kg of B. Calculate the material yield variance.

Show the solution
  1. Standard batch cost: A 60 × $5 = $300. B 40 × $10 = $400. Total $700 for 100 kg of input.
  2. Standard average cost per kg of input = $700 ÷ 100 = $7.00.
  3. Actual total input = 3,100 + 2,100 = 5,200 kg.
  4. Standard input for actual output = 4,500 × (100 ÷ 90) = 5,000 kg.
  5. Difference = 5,000 − 5,200 = 200 kg more input than allowed.
  6. Variance = 200 × $7.00 = $1,400. It is adverse because more input was used.
  7. Check on output basis: standard output from 5,200 kg = 5,200 × 0.9 = 4,680 kg. Actual output is 4,500 kg, so 180 kg less. Standard cost per kg of output = $700 ÷ 90 = $7.7778. 180 × $7.7778 = $1,400 adverse.

Answer: Material yield variance = $1,400 adverse.

Example 2

A standard batch for product Y uses 8 litres of P at $3 per litre and 12 litres of Q at $2 per litre. It gives 18 litres of output. Actual output was 9,000 litres. Actual input was 3,900 litres of P and 5,900 litres of Q. Calculate the material yield variance, the mix variance and the total usage variance.

Show the solution
  1. Standard batch cost: P 8 × $3 = $24. Q 12 × $2 = $24. Total $48 for 20 litres.
  2. Standard average cost per litre of input = $48 ÷ 20 = $2.40.
  3. Actual total input = 3,900 + 5,900 = 9,800 litres.
  4. Standard input for actual output = 9,000 × (20 ÷ 18) = 10,000 litres.
  5. Yield variance = (10,000 − 9,800) × $2.40 = $480 favourable.
  6. Mix variance: actual input 9,800 in standard proportions (40% P, 60% Q) = P 3,920 and Q 5,880.
  7. P: (3,920 − 3,900) × $3 = $60 favourable. Q: (5,880 − 5,900) × $2 = $40 adverse. Mix = $20 favourable.
  8. Total usage = $480 F + $20 F = $500 F.
  9. Check: standard cost of actual output = 10,000 × $2.40 = $24,000. Actual input at standard prices = 3,900 × $3 + 5,900 × $2 = $11,700 + $11,800 = $23,500. Difference = $500 favourable.

Answer: Yield variance $480 favourable. Mix variance $20 favourable. Total material usage variance $500 favourable.

Exam tips

  • In Section A and B, the yield variance is often a one-line calculation. Do the input-for-output step first and keep the standard average cost to hand.
  • Always show the standard average cost per unit of input in Section C. It earns method marks even if a later figure is wrong.
  • Say F or A in every answer. A correct number with the wrong label can lose the mark.
  • Use the usage check: mix + yield must equal the total usage variance. This catches errors quickly.
  • When asked to explain, link the cause to the process. Examples are poorer quality material, machine problems or untrained staff. State that a cheaper mix can raise waste and cut yield.

Practice questions from Material mix and yield variances

Calculating the Material Yield Variance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Calculating the Material Yield Variance: frequently asked questions

What is the formula for the material yield variance?

It is (standard input for actual output − actual total input) × standard average cost per unit of input. A positive result is favourable. A negative result is adverse.

What is the difference between the mix variance and the yield variance?

The mix variance measures the effect of using materials in different proportions from the standard. The yield variance measures the effect of using more or less total input than the output should need. Together they make up the material usage variance.

Is the yield variance based on input or output?

You can calculate it either way. Input basis: input difference × standard cost per unit of input. Output basis: output difference × standard cost per unit of output. Both give the same answer, so use one as a check on the other.

Does the material yield variance use actual prices?

No. It is a usage variance, so everything is valued at standard prices. Actual prices only matter for the material price variance.