Title: Mix and Yield Variances
Course: BAC300: Management Accounting I (PEBL) > Section: LESSON TEN: Mix and Yield Variances

1.1  Introduction

In this first lesson, we lay the foundation for the entire course by defining the concept entrepreneurship and other related terms. Throughout our teaching experiences, we have found that an understanding of the basic principles behind the subject and their applications increases the students’ motivation for the subject. We therefore introduce you to the theories upon which entrepreneurship study is based and encourage you to engage in in-depth discussions of these concepts and theories. Since the term entrepreneurship is closely associated with small businesses, we introduce the concept of small business too. The purpose of this lesson is to enable you understand fundamental concepts and theories of entrepreneurship.

10.1 Introduction

Lesson-level overview | Lesson/week/section | 10.
Lesson name: | Mix and Yield Variances
Aim of the lesson: | This lesson introduces you to mix and yield variances for materials, labour and sales which will help you in control of resources.
This lesson covers:
- Material mix and yield variances.
- Labour mix and yield variances.
- Sales mix and quantity variances.
Intended learning outcomes:
At the end of this lesson, you will be able to:

1. Determine material mix and yield variances.
2. Evaluate labour mix and yield variances.
3. Calculate sales mix and quantity variances.

Overview of student activity:
1.Pre-lesson activity – Watching a video on material mix and yield variances and making a class presentation on the same.

2. Engaging in e-tivities 10.1, 10.2, 10.3 that involves reading linked resources and watching videos on yield variances for materials, labour and sales.

3. Evaluating financial performance of an organization (10.3)

4. Interactions on the discussion forums

Constructive alignment of lesson level outcomes with module level outcomes, learning activities and assessment

(Pressing <Tab> at the end of the table will provide additional rows in the table, if required.)
Intended Lesson learning outcomes: | No of module-level outcome | Activity where students engage with this outcome | Where and how is this outcome assessed?
At the end of this Lesson, you will be able to:
Determine material mix and yield variances. | 4 | 10.1 | 10.1 (a) and (b) Calculation questions
Evaluate labour mix and yield variances. | 4 | 10.2 | 10.2 (a) and (b) Calculation questions
Calculate sales mix and quantity variances. | 4 | 10.3 | 10.3 (a) and (b) Calculation questions

Detailed explanation of ALL student and teacher engagement with the Lesson:

(This should be presented in the order that the activities take place.  So if students do work online before coming to the lecture, that should be shown ahead of what happens in class.

If there is more than one opportunity for face-to-face contact, or more than one online task, there should be a separate section for each instance, and they should be presented in the template in the same order that students encounter them.)

Content – such as lecture material – can EITHER be shown here OR added as clearly identifiable addenda to the document.  If you plan to use addenda, you should ensure that these are cross-referenced in this section.)
Module-level outcomes addressed:
Lesson ten addresses module learning outcome 4, evaluation of financial performance.
Purpose of the Lesson/week/section:
This lesson will help you understand the various mix and yield variances for materials, labour and sales. This will give you the skills required to evaluate financial performance.
Over to you: (a description of the process of the section)
You will start by watching a video on material mix and yield variances and making key points that you will present during the face to face class. You will then engage in e-tivities 10.1, 10.2 and 10.3 that exposes you to more details on yield variances for materials, labour and sales so as to get knowledge and skills required to evaluate financial performance.
Pre-lesson activity: | Number of hours | 1
Watch video and on material mix and yield variances. Isolate the key points that you are going to present during the face to face class
Face to face time: (if applicable) | Number of hours | 1
Explain the learning outcomes

Explain the link between the previous lesson and the current one

Present key points highlighted from the pre-lesson video

Introduce the material, labour and sales mix and yield variances

E-tivity 10.1

Online activity: | Number of hours | 1
What should students do?
E-tivity 10.1

You have watched the video of material mix and yield variances on pre-lesson activity. Watch another video1 and video2  then;

a) Using the information from the pre-lesson video, video 1, video 2 and the following data

Standard Mix | Actual Mix
Materials | Kilograms | Prices | Materials | Kilograms | Prices
X | 50 | 2 | X | 60 | 3
Y | 30 | 3 | Y | 40 | 4
Z | 20 | 4 | Z | 10 | 5
Total | 100 |  |  | 110 |

Determine:

I) Material cost variance

II) Material usage variance

III) Material price variance

IV) Material mix variance

V) Material yield variance

b) A company produces a single product using the flowing mixture of materials

Standard mix | Actual mix
Materials | Materials (Kgs) | Prices (Kshs) | Materials | Materials (Kgs) | Prices (Kshs)
X | 10 | 10 | X | 11 | 11
Y | 8 | 8 | Y | 9 | 10
Z | 5 | 6 | Z | 6 | 5

Actual output 1,000 units

Determine

I) Material cost variance

II) Material usage variance

III) Material price variance

IV) Material mix variance

V) Material yield variance

After you have posted your answers on the discussion forum, read the facilitator’s feedback and make any necessary corrections.
Where do they do it? | On the discussion forum 10.1
By when should they do it? | Before the next lesson
E-moderator/tutor role
Provide feedback on e-tivity 10.1 tasks.
How are the learning outcomes in this lesson assessed? | Number of hours | 1
Computational questions
How does this section link to other sections of the module?
It forms the foundation of mixed and yield variances and the basis for further interactions in e-tivities 10.2 and 10.3.

E-tivity 10.2

= Total number of hours | 4 |
Online activity: | Number of hours | 1
What should students do?
E-tivity 10.2

Watch  video1 and video2 and use the information to calculate the following:

(a) Standard labour hours and rate for production of a product are provided as follows:

Category of labour                Hours.                     Rate/hour

                                                                                   Sh.

Skilled                                        5                             15

Unskilled                                    8                              5

Semi-skilled                               4                              7.5

Actual Data:

Output                                       1,100 units

Skilled                                        4,500 hours.            20

Unskilled                                 10,000 hours.            4.5

 Semi- skilled                             4,200 hours.            7.5

Evaluate:

(i) Labour cost variance

(ii) Labour efficiency variance

(iii) Labour rate variance

(iv) Labour mix variance

(v) Labour yield variance

(b) From the following information of manufacturing a product

 | Standard | Actual
Categories | Number | Hours | Hour Rate (sh.) | Number | Hours | Hour Rate (sh.)
Skilled | 10 | 3 | 50 | 15 | 4 | 60
Semi-skilled | 20 | 6 | 30 | 25 | 8 | 35
Unskilled | 30 | 10 | 20 | 40 | 12 | 18

Evaluate:

(i) Labour cost variance

(ii) Labour efficiency variance

(iii) Labour rate variance

(iv) Labour mix variance

(v) Labour yield variance

(c) Once you have posted your answers on the discussion forum, read what three of your colleagues in the tutorial group have posted and comment on their answers. Read the facilitator’s feedback and make corrections to your answer if necessary.
Where do they do it? | On the discussion forum 10.2
By when should they do it? | Before the next lesson.
E-moderator/tutor role
Provide feedback on e-tivity 10.2 tasks.
How are the learning outcomes in this Lesson assessed? | Number of hours | 1
Computational questions
How does this section link to other sections of the module?
It is a continuation on the mixed and yield variances and for the basis for further interactions in e-tivity 10.3.

E-tivity 10.3

Online activity: | Number of hours | 1
What should students do?
E-tivity 10.3

Use the information from video1 and video2  and the one here below to answer the questions that follow:

(a) Sky Limited budgets to sell the following products in the first quarter of the year.

Standard Mix | Actual Mix
Products | Quantity | Prices | Quantity | Prices
X | 500 | 3 | 400 | 4
Y | 400 | 2 | 500 | 1
Z | 100 | 5 | 50 | 4
Total | 1,000 |  | 950 | 110

Calculate:

(i) Sales Variance

(ii) Sales Price Variance

(iii) Sales Volume Variance

(iv) Sales Mix Variance

(b) The standard profit and actual profits are as follows:

Standard Profit | Actual Profit
Products | Units | Profit Sh. | Total Profit sh. | Units | Profit sh. | Total Profit sh.
A | 400 | 8 | 3,200 | 300 | 8 | 2,400
B | 600 | 6 | 3,600 | 700 | 6 | 4,200
C | 1,000 | 4 | 4,000 | 1,200 | 4 | 4,800
 | 2,000 |  | 10,000 | 2,200 |  | 11,000

Calculate:

(i) Sales variance

(ii) Sales mix variance

(iii) Sales quantity variance

(c) Review their answers during the face to face class.
Where do they do it? | On the discussion forum 10.3
By when should they do it? | Before the next lesson
E-moderator/tutor role
Ensure that learners are focused on the contents and context of discussion.
How are the learning outcomes in this lesson assessed? | Number of hours | 1
Computation question
How does this section link to other sections of the module?
It lays foundation for the next lesson.

Some important questions

Some important questions
Which learning resources/ references will scaffold the students’ learning?
1. Nptelhrd (2015) Mix and yield variance, retrieved from: https://www.youtube.com/watch?v=glfDEnCFYLY&t=411s
2. Nptelhrd (2015) Material mix and yield variances: retrieved from: https://www.youtube.com/watch?v=glfDEnCFYLY
3. Svtuition(2011) Labour mix variance, retrieved from:  https://www.youtube.com/watch?v=S0HonMmZff4&t=129s
4. Kanwaljeet K.(2017) standard costing retrieved from https://www.youtube.com/watch?v=TNB3M2BdxFU
How are students enabled to access the resources? | Resources are shared in the module that is loaded in the Learning Management System (LMS) and all students have access to it. The same module is placed on the OER Africa website.
Where in this lesson are students expected to work collaboratively? | Discussion forum 10.1,10.2 and 10.3
How has an inclusive approach been incorporated in this lesson? | a) Use of multimedia resources in the module and differentiated learning activities. b) Use university computer labs, all resources are downloadable for offline use and discounted data bundles are available to students. c) Use of accessibility button for learners with special needs on the LMS.
How will feedback on lesson be obtained from students? | Through the posts in the discussion forum 10.1, 10,2 and 10.3
How will student feedback be used to improve lesson? | By incorporating suggestions in the course for the current and subsequent cohorts.
At which point(s) will students receive formative feedback on the work they have done in the lesson? | Before the next lesson.