Page 20 - MAC4861_2 Costing class slides part 2
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STANDARD COSTING
Mix And Yield Variances Recap
• Mix and yield variances are calculated for sales, direct
materials and direct labour and the following should be
noted:
• In the case of direct materials, the material mix and yield
variances explain the materials usage variance in
situations where more than one material class is used in
the manufacturing process of a product.
• In the case of direct labour, the labour mix and yield
variances explain the labour efficiency variance in
situations where more than one class of direct labour is
used in the manufacturing process. Class is for instance
defined by skill level (i.e. skilled or unskilled)
• In the case of sales, the sales mix and yield variances
explain the sales volume variance in situations where
more than one product with varying unit contributions or
profits is sold.
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