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Performance Management · Standard costing

Mix and Yield Variances: How to Calculate Them in ACCA PM

Updated 11 October 2026 · Fact-checked

Mix and yield variances split the material usage variance when inputs can be substituted. The mix variance compares actual input quantities with the same total input in standard proportions, valued at standard prices. The yield variance values the output gained or lost from total input at standard cost. Together they equal the usage variance.

Understand Mix and Yield Variances

Some products are made from several inputs that can be swapped. A chemical blend, a food recipe or a mix of skilled and unskilled labour are examples. The standard sets a mix, such as 60% A and 40% B, and a yield, such as 90 kg of output from 100 kg of input.

The ordinary usage variance compares actual quantity used with the standard quantity for actual output, input by input. It does not tell you why. Two things can go wrong. Managers may have used a different blend from the standard. Or the total input may have produced more or less output than expected.

The mix variance isolates the first cause. You take the actual total input and re-spread it in the standard proportions. You then compare that with the actual mix, input by input, at standard price. If you use more of an expensive input than the standard blend, the mix variance is adverse.

The yield variance isolates the second cause. It asks what output the actual total input should have produced, and compares that with the actual output. The difference is valued at the standard cost per unit of output. Less output than expected gives an adverse yield variance.

Mix plus yield always equals the total material usage variance. The same logic works for labour. Labour mix is the grade-by-grade split. The yield equivalent for labour is the efficiency variance on total hours. Mix variances only make sense when inputs are truly substitutable and quality is not harmed.

Key rules to remember

Standard usage variance
(Standard quantity for actual output − Actual quantity) × Standard price
Worked input by input. Adverse if actual use is higher.
Material mix variance
(Actual total input in standard mix − Actual quantity of each input) × Standard price
Add across inputs. Positive is favourable. Total input quantity is the same on both sides.
Material yield variance
(Actual output − Standard output from actual input) × Standard cost per unit of output
Positive is favourable, negative is adverse. Equivalent shortcut in input units: (Standard total input for actual output − Actual total input) × Standard average cost per unit of input.
Standard output from actual input
Actual total input × (Standard output ÷ Standard input)
Uses the standard yield, for example 90 ÷ 100.
Reconciliation
Mix variance + Yield variance = Usage variance
Use this to check your answer every time.
Labour mix variance
(Actual total hours in standard mix − Actual hours of each grade) × Standard rate
Same method as materials, with hours and rates. Yield equals the efficiency variance on total hours.

How to solve Mix and Yield Variances questions

Use the same layout for any mix and yield question, for materials or labour. Keep every figure in a table.

  1. 1Write the standard mix per batch: quantity and price of each input, total input, standard output and standard cost.
  2. 2Find the standard cost per unit of input (total standard cost ÷ total input) and per unit of output (total standard cost ÷ standard output).
  3. 3Calculate the standard quantity of each input for actual output. Do this by scaling the standard batch up to the actual output.
  4. 4Calculate the usage variance for each input: (standard quantity for actual output − actual quantity) × standard price.
  5. 5Total the actual input. Re-spread it in standard proportions to get the actual quantity in standard mix for each input.
  6. 6Calculate the mix variance for each input: (actual quantity in standard mix − actual quantity) × standard price. Add them up.
  7. 7Calculate the yield variance: compare actual output with standard output from actual input, valued at standard cost per unit of output.
  8. 8Check that mix plus yield equals usage. Then label each variance adverse or favourable and add a brief comment.

Quickest way: Total-based shortcut using average cost

When to use it: Use it when the question asks only for total mix and yield variances, not input-by-input detail.

  1. Calculate yield first: (standard total input for actual output − actual total input) × standard average cost per unit of input.
  2. Calculate the total usage variance by working through each input quickly, or as total standard cost of actual output minus cost of actual input at standard prices.
  3. Get mix by difference: mix = usage − yield. Keep the signs.
  4. Check mix by a second route: standard cost of actual input in standard mix minus standard cost of actual input in actual mix.
  5. Use the full input-by-input table only when the question asks which input drove the mix variance.

Common mistakes in Mix and Yield Variances

  • Using actual prices in mix and yield variances

    Students mix these up with price variances, which use actual prices.

    Fix: Mix, yield and usage variances are always valued at standard price or standard cost. The price variance is separate.

  • Valuing yield at standard cost per input unit while using output figures

    Input and output units get confused, especially when there is normal loss.

    Fix: If you measure the gap in output units, use standard cost per unit of output. If you measure it in input units, use standard cost per unit of input.

  • Re-spreading the standard input rather than the actual total input

    Students use the standard quantity for actual output as the base for the mix.

    Fix: The mix comparison uses the actual total input in standard proportions. This keeps total quantity equal on both sides, so only the blend differs.

  • Getting the sign wrong

    The order of subtraction changes between questions, and the rule for input quantities is wrongly applied to output units.

    Fix: For input quantities, take the standard figure minus the actual figure. For yield measured in output units, reverse it: actual output minus standard output from actual input. In both cases positive is favourable and negative is adverse. Then check that mix plus yield equals usage.

  • Ignoring the standard loss in the yield

    Students treat 100 kg input as 100 kg output.

    Fix: Apply the standard yield, such as 90%, to the actual total input before comparing with actual output.

  • Interpreting the variance without thinking about quality

    Students stop at the number.

    Fix: A favourable mix may come from using cheaper inputs that cut yield or quality. Always comment on the link between mix and yield.

Worked examples

Example 1

A product uses two materials. The standard input for one batch is 60 kg of A at $5 per kg and 40 kg of B at $10 per kg. A batch gives 90 kg of output. In a period, actual output was 1,800 kg. Actual input was 1,300 kg of A and 800 kg of B. Calculate the material usage, mix and yield variances.

Show the solution
  1. Standard cost per batch: A 60 × 5 = $300; B 40 × 10 = $400; total $700 for 100 kg input and 90 kg output.
  2. Standard average cost per kg of input = 700 ÷ 100 = $7. Standard cost per kg of output = 700 ÷ 90 = $7.78 (approx).
  3. Batches for actual output = 1,800 ÷ 90 = 20. Standard quantities: A 1,200 kg, B 800 kg, total 2,000 kg.
  4. Usage: A (1,200 − 1,300) × 5 = $500 adverse. B (800 − 800) × 10 = $0. Total usage = $500 adverse.
  5. Actual total input = 2,100 kg. In standard mix: A 60% = 1,260 kg, B 40% = 840 kg.
  6. Mix: A (1,260 − 1,300) × 5 = $200 adverse. B (840 − 800) × 10 = $400 favourable. Total mix = $200 favourable.
  7. Yield: standard output from 2,100 kg = 2,100 × 0.9 = 1,890 kg. Actual output 1,800 kg. Shortfall 90 kg × $7.78 = $700 adverse. Check: (2,000 − 2,100) × $7 = $700 adverse.
  8. Reconcile: $200 favourable mix + $700 adverse yield = $500 adverse usage. This agrees.

Answer: Usage $500 adverse; mix $200 favourable; yield $700 adverse.

Example 2

A task has a standard labour requirement per unit of 4 hours of skilled labour at $20 per hour and 6 hours of semi-skilled labour at $12 per hour. In a period, 500 units were made. Actual hours worked were 2,300 skilled and 2,700 semi-skilled. Calculate the labour mix variance and the labour yield (efficiency) variance. Ignore idle time and rate variances.

Show the solution
  1. Standard cost per unit: skilled 4 × 20 = $80; semi-skilled 6 × 12 = $72; total $152 for 10 hours. Average standard cost = $15.20 per hour.
  2. Standard hours for 500 units: skilled 2,000, semi-skilled 3,000, total 5,000 hours.
  3. Actual total hours = 2,300 + 2,700 = 5,000. In standard mix: skilled 40% = 2,000, semi-skilled 60% = 3,000.
  4. Mix: skilled (2,000 − 2,300) × 20 = $6,000 adverse. Semi-skilled (3,000 − 2,700) × 12 = $3,600 favourable. Total mix = $2,400 adverse.
  5. Yield: standard hours for actual output 5,000 − actual hours 5,000 = 0. Yield variance = $0.
  6. Check by averages: actual mix at standard rates = 2,300 × 20 + 2,700 × 12 = 46,000 + 32,400 = $78,400. Standard mix cost = 5,000 × 15.20 = $76,000. Difference $2,400 adverse. Total efficiency (usage) = $2,400 adverse = mix + 0.

Answer: Labour mix variance $2,400 adverse; labour yield (efficiency) variance nil.

Exam tips

  • In Section C, set out a table first: standard, actual, actual in standard mix. Marks go for method even if one number is wrong.
  • In objective test questions, the options often include the usage variance and the wrong sign. Calculate mix by difference only after checking the usage variance.
  • Always reconcile mix plus yield to usage. It is the fastest way to find an arithmetic slip.
  • Written parts usually ask why a variance arose or whether it is useful. Link mix to cost saving and yield to quality or waste. Mention interdependence.
  • State clearly whether each variance is adverse or favourable, and show the units. Do not leave the sign to the examiner.

Practice questions from Standard costing

Mix and Yield Variances in other exams

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

Mix and Yield Variances: frequently asked questions

What is the difference between mix variance and yield variance?

The mix variance measures the cost effect of using a different blend of inputs from the standard. The yield variance measures the cost effect of getting more or less output than the standard from the total input used. Together they make up the usage variance.

How do I calculate the material mix variance in ACCA PM?

Take the actual total input and split it in the standard proportions. Subtract the actual quantity of each input from this figure and multiply by the standard price. Add the results. A positive total is favourable.

Is the labour yield variance the same as the efficiency variance?

For labour, the yield-type variance is the efficiency variance based on total hours. The labour mix variance looks at the split between grades. Together they equal the total labour efficiency variance when you ignore idle time.

Why can a favourable mix variance come with an adverse yield variance?

Cheaper inputs may lower the cost of the blend but reduce the output from each unit of input. The saving on price is then offset by lower yield. This is common in the exam and is a frequent comment point.