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ACCA PM知识点：Materials yield variance

文章来源：ACCA全球官网

发布时间：2021-09-07 11:27

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Materials yield variance

Where there is a difference between the actual level of output for a given set of inputs and the standard output for a given set of inputs,a materials yield variance arises.In our optimum mix,we calculated that 20kg of inputs of A and B should produce 19kg of our output,C.We are effectively saying that there is a loss rate of 5%(20–1/20)in our process,ie our outputs,in kg,should be 95%of our inputs.Applying this to our example then,we can say that we would have expected our inputs of 2,000kg to yield an output of 95%of 2,000kg,ie 1,900 kg.Our actual yield was only 1,850kg,which is 50kg less than we would have expected.To calculate the materials yield variance,all we have to do is value this difference between the actual yield(1,850kg)and the expected yield for our given set of inputs(1,900kg)at the standard cost of our output,C,ie at$24 per kg.It is easy to see how to calculate this when we look at it logically and present it in a very simple table as shown in Table 2.

No formula really needs to be learnt if you understand the logic behind the materials yield variance and grasp the principle that any price differences between actual and standard are always dealt with by the price variance alone.However,for those who do prefer to use a formula,the materials yield variance formula is:

(Actual yield–standard yield from actual input of material)x standard cost per unit of output

(1,850kg–1,900kg)x$24=$1,200 Adverse

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From our example,it can be seen that there is a direct relationship between our materials mix variance and our materials yield variance.By using a mix of materials that was different from standard,we have resulted in a saving of$500,in standard cost terms.However,the downside of this is that our cheaper mix of materials has resulted in a significantly lower yield of material C than we would have got had our standard mix of materials been adhered to.This yield was$1,200 lower than it would have been,which is over double the amount that we saved by using a cheaper mix of materials.

Overall,by netting the two variances off against each other,we have an adverse material usage variance of$700($1,200 A less$500 F).As indicated earlier on in the article,this could have been calculated on its own,without breaking it down further into its mix and yield elements,by comparing the quantity of materials we expected to use(based on standard usage)for our actual production to the quantity of material we actually did use for our production.

Using my preferred method of a table,our calculations would look like Table 3.

Actual production of 1,850kg requires an input of 1,947kg(1,850 x 100/95)in total of A and B

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Again,if you like to learn the formula,this is shown below,although it would have to be applied separately to each type of material.

(Standard quantity for actual production–actual quantity)x standard cost

Understanding the bigger picture

Now that you understand how to deal with the numerical side of materials mix and yield variances,and the fact that these are simply a detailed breakdown of the material usage variance,it is also important to stress the fact that quality issues cannot really be dealt with by this variance analysis.I have mentioned the fact that there is a direct relationship between the mix and the yield variance and that neither of these can be considered in isolation.In addition to this,however,it is also essential to understand the importance of producing products that are of a consistently good quality.It can be tempting for production managers to change the product mix in order to make savings;these savings may lead to greater bonuses for them at the end of the day.However,if the quality of the product is adversely affected,this is damaging to the reputation of the business and hence its long‑term survival prospects.While substituting poor quality input materials may in some cases lead to yield volumes that are the same as those achieved with higher quality materials,the yield may not be of the same quality.

Unfortunately,this factor cannot be incorporated into the materials yield variance.In the long run,it may be deduced from an adverse sales volume variance,as demand for the business’s product decreases,but it is likely to take time for sales volumes to be affected.Any sales volume variance that does arise as a result of poor quality products is likely to arise in a different period from the one in which the mix and yield variances arose,and the correlation will then be more difficult to prove.

Similarly,poorer quality materials may be more difficult to work with;this may lead to an adverse labour efficiency variance as the workforce takes longer than expected to complete the work.This,in turn,could lead to higher overhead costs,and so on.

Fortunately,consequences such as these will occur in the same period as the mix variance and are therefore more likely to be identified and the problem resolved.Never underestimate the extent to which a perceived‘improvement’in one area(eg a favourable materials mix variance)can lead to a real deterioration in another area(eg decreased yield,poorer quality,higher labour costs,lower sales volumes,and ultimately lower profitability).Always make sure you mention such interdependencies when discussing your variances in exam questions.The number crunching is relatively simple once you understand the principles;the higher skills lie in the discussion that surrounds the numbers.

Written by a member of the Paper F5 examining team

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