what does yield variance tell you 
yield variance is a common financial and operational metric within manufacturing industries to improve or enhance the measure it s fairly regular for an analyst to adjust inputs for special scenarios for instance during a raw material price spike it may not make sense to use temporary price inputs experiencing short term jumps in prices as these results would be distorted from normal levels here like any other analysis it is part art and science generally yield variance uses direct materials which are raw materials that are made into finished products these are not materials used in the production process direct materials are goods that physically become the finished product at the end of the manufacturing process in other words these are the tangible pieces or components of a finished product if a firm overestimates or underestimates how much material it requires to take to generate a certain amount the material s yield variance will be less than or greater than zero if the standard quantity is equal to the quantity actually used then the variance will be zero if the direct materials yield variance proves that the company is producing less than originally planned for a given level of input the company can review their operations for ways to become more efficient intuitively producing more products with the same level of inventory while keeping quality constant can help the organization improve profitability while a yield variance may tell you whether or not your output is efficient or as expected it can t tell you why the variance occurred or what contributed to it yield variance vs mix varianceyield variance is a measure of the difference in output meanwhile mix variance is the difference in overall material usage or inputs specifically material usage can vary because a mix of products or inputs is used which are different from the standard mix example of using yield varianceif 1 000 units of a product are the standard output based on 1 000 kilograms of materials in an 8 hour production unit and the actual output is 990 units there is an unfavorable yield variance of 10 units 1 000 990 if the standard cost is 25 per unit the unfavorable yield variance would be 250 10 x 25 or consider company abc which will produce 1 000 000 units of a toy for every 1 500 000 units of specialized plastic parts in its most recent production run company abc used 1 500 000 plastic units but only produced 1 250 000 toys the cost of plastic units is 0 50 per unit the yield variance is 