2 Mix Yield Variances - Lecture notes 1 PDF

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Mix and Yield Variances Lecture...

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We e k1–L e c t u r e2 Mi xa n dYi e l dV a r i a n c e s T o t a l Ma t e r i a l V a r i a n c e : T MV=SC–A C Ma t e r i a l Pr i c eVa r i a n c e : MPV=( SP–AP) AQ Ma t e r i a l Us a g eV a r i a n c e : MUV=( SQ–AQ) SP Sp l i t MUVi n t o : Mi xV a r i a n c ec a l c u l a t e dwi t h7s t e p s : St e p1 : Ac t u a l Qu a n t i t yUs e d . St e p2 : St a n d a r dUs a g ePr o p o r t i o n . St e p3 : Ca l c u l a t efl e x e ds t a n d a r db a s e do nt o t a l a c t u a l q u a n t i t yu s e d . St e p4 : Di ff e r e n t b e t we e ns t e p3a n ds t e p1fi g u r e s( 3 1 ) , o p p o s i t ef o rs a l e sv a r i a n c e . St e p5 : s t a n d a r dma t e r i a l c o s t f o rs i n g l eu n i t . St e p6 : c a l c u l a t ev a r i a n c e( s t e p4xs t e p5 ) . St e p7 : t o t a l u pf o r fi n a l mi xv a r i a n c e . Yi e l dV a r i a n c e–c a l c u l a t e dwi t h5s t e p s : St e p1 : a c t u a l ma t e r i a l i n p u t , h o wma n yb a t c h e swe r ema d e . St e p2 : a c t u a l ma t e r i a l i n p u t , h o wma n yb a t c h e ss h o u l dh a v eb e e nma d ei nr e g a r d st os t a n d a r d s . St e p3 : s t e p1–s t e p2 . St e p4 : s t a n d a r dc o s t p e r b a t c h . St e p5 : s t e p3xs t e p4=y i e l dV a r i a n c e . Mi xa n dYi e l dv a r i a n c e sa r e n ’ t l i mi t e dt oj u s t ma t e r i a l v a r i a n c e s , c a na l s ob eu s e do n :   

Sales Labour Variable Overheads

Wh e n2o rmo r ema t e r i a l sa r emi x e dt o g e t h e r t oc r e a t eap r o d u c t , t h eq u a n t i t i e so f e a c hma t e r i a l u s e d c a nd i ff e r : Mi xV a r i a n c e s( i n p u t ) : Ex p l a i n sh o wt h ed i ff e r e n t p r o p o r t i o n so f t h emi xo f ma t e r i a l su s e dc r e a t eau s a g ev a r i a n c ec o mp a r e d t ot h es t a n d a r dmi x . Ch a n g i n gt h emi xma yr e s u l t i nac h a n g ei nq u a l i t ya n dma yl e a dt op r o d u c t sb e i n gr e j e c t e dt h r o u g h q u a l i t ya s s u r a n c e . Yi e l dV a r i a n c e s( o u t p u t ) : Ex p l a i n sh o wmo r eo rl e s so u t p u t h a sb e e nc r e a t e dd u et oad i ff e r e n c ei nma t e r i a l i n p u t u s a g e c o mp a r e dt ot h es t a n d a r d . Sh o wsh o wmu c hl o s sh a sh a p p e n e dv ss t a n d a r dn o r ma l l o s s . Mi xa n dy i e l dv a r i a n c e ss h o u l do n l yb ea n a l y z e di f ma n a g e me n t c a ni n fl u e n c et h ei n p u t s ....