Page 20 - Manac Costing Test 2 class slides - 1. Standard Costing
P. 20
STANDARD COSTING
Mix And Yield Variances Recap
• The materials must be used in a mixture and manipulating the input
qualities of one would result in more or less being used of the other
inputs (there can be substitutions among and between materials).
• An example would be where more milk is used and less cooking oil in a
dough mixture.
• On the other hand, it cannot be used in a motor assembly plant, e.g. a car
cannot be fitted with only one tail light, but instead have two bumpers at
the back!
• The fact that a product requires more than one material or
component as input does not automatically lead to a mixture.
Please read the scenarios presented to you carefully.
• If more than one product is sold, you can always calculate mixture
variances between the products.
• A change in input mixture could be driven by changes in the price of
one or more of the required inputs, or it is pure sloppiness. Make
the connection if enough information is provided to support it.
• A change in input mixture could lead to changes in the quality of the
final output, and the resulting “good” output. Make the connection
if enough information is provided to support it.
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