Mix and Yield Variances

Question 1

1The efficiency variance for either direct labor or materials can be divided into
A. Spending variance and yield variance.
B. Yield variance and price variance.
C. Volume variance and mix variance.
D. Yield variance and mix variance.

Answer 1

Answer (D) is correct.
A direct labor or materials efficiency variance is calculated by multiplying the difference between
standard and actual usage times the standard cost per unit of input. The efficiency variances can be divided into yield and mix variances. Mix and yield variances are calculated only when the production
process involves combining several materials or classes of labor in varying proportions (when
substitutions are allowable in combining resources).

Question 2

4A materials or labor mix variance equals
A. The actual total quantity of inputs times the difference between the weighted-average standard price for
standard mix and the weighted-average standard price for actual mix.
B. The actual total quantity of inputs times the difference between the weighted-average budgeted price for
inputs and the weighted-average actual price for inputs.
C. The budgeted total quantity of inputs times the difference between the weighted-average budgeted price
for inputs and the weighted-average expected price for inputs.
D. The actual total quantity of inputs times the difference between the weighted-average actual price for
inputs and the weighted-average expected price for inputs.

Answer 2

Answer (A) is correct.
Mix and yield variances are the components of the usage (quantity or efficiency) variance. Mix and
yield variances can only be calculated when inputs are substitutable. The mix variance isolates the
effects of changes in the mix of inputs used. The mix variance equals actual total quantity (ATQ) times
the weighted-average standard price for the standard mix (SMSP) minus the weighted-average
standard price for the actual mix (AMSP).

Question 3

10A materials or labor yield variance equals
A. The difference between the standard total quantity of inputs and the actual total quantity of inputs times
the weighted-average standard price of the actual mix of inputs.
B. The actual total quantity of inputs times the difference between the weighted-average standard price of
the standard mix of inputs and the weighted-average standard price of the actual mix of inputs.
C. The standard total quantity of inputs times the difference between the weighted-average standard price
using the standard mix of inputs and the weighted-average standard price of the actual mix of inputs.
D. The difference between the standard total quantity of inputs and the actual total quantity of inputs times
the weighted-average standard price of the standard mix of inputs.

Answer 3

Answer (D) is correct.
Mix and yield variances are the components of the usage (quantity or efficiency) variance. Mix and
yield variances can only be calculated when inputs are substitutable. The yield variance measures how
efficiently the actual mix of inputs was used to produce the given output. The yield variance equals
standard total quantity (STQ) minus the actual total quantity (ATQ) times the weighted-average
standard price of the standard mix of inputs (SMSP).

Question 4

11The labor mix and labor yield variances together equal the
A. Total labor variance.
B. Labor rate variance.
C. Labor efficiency variance.
D. Sum of the labor efficiency and overhead efficiency variances

Answer 4

Answer (C) is correct.
Labor mix and labor yield variances are the components of the total labor efficiency variance. For
example, if the labor yield variance was $500 U and the labor mix variance was $320 U, the total labor
efficiency variance would be $820 U.