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ACCA Applied Skills · Performance Management · Material mix and yield variances

In a standard costing system, the material mix variance and the material yield variance added together equal which other variance?

The mix and yield variances together equal the total material usage variance. Usage compares standard quantities for actual output with actual quantities at standard prices, and it splits into the effect of input proportions (mix) and total input against output (yield). Price effects are excluded.

  1. AThe total material usage varianceCorrect
  2. BThe total material price variance
  3. CThe total material cost variance
  4. DThe sales volume variance

Explanation

The usage variance compares standard quantity for actual output with actual quantity, both at standard prices. It is split into mix, which looks at the proportions of inputs, and yield, which looks at the total quantity of input against output. The two components therefore sum to the usage variance. The total cost variance would also include price.

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