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quantity variance and yield variance

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quantity variance and yield variance

Hello friends , can any one please help , is quantity variance and yield variance same, because I found both using same formula for calculation in bpp kit , actual sales std mix and std sales std mix , thanks

May 27th 2016 AN ACCA USER 520 Points

2 Replies

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Hi, I used to be confused about that problem same as you. Basically there are same, but when the question has, for example, multi product like A,B, C,... you calculate quantity variance seperately, but you can calculate yield variance by sum up total quantity of ABC. that is what I saw in the answer of ACCA practice book.

May 31st 2016 AN ACCA USER 180 Points
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No, quantity variance focuses on inputs and is the difference between:
Actual quantity used compared to the amount budgeted/expected to use to produce the actual amount of output. (Eg the budget is set at 10kg of material A required to produce 5kg of output...Actual produced output is 10kg so budgeted input of Material A would be 20kg. If 25kg of Material A was actually used, the quantity variance is 5kg ADV).
Yield variance focuses on the Output, ie the difference between the actual amount produced compared to what was budgeted to be produced...if the quality of raw materials is better than expected, the yield of finished goods may be higher than budgeted.
Hope that helps and use for practising, lectures and clearer explanations!

June 1st 2016 AN ACCA USER 190 Points