FNM32 UNIT 3 DISCUSSIONZERFF920001435

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School
University of Johannesburg **We aren't endorsed by this school
Course
FINANCE AN 13
Subject
Management
Date
May 23, 2023
Pages
1
Uploaded by JusticeFoxPerson660 on coursehero.com
FINANCIAL MANAGEMENT 32 UNIT 3 DISCUSSION STUDENT 920001435 Explain the potential reasons for mix and yield variances A number of reasons can lead to mix variances . Mix variances can be caused by a lack of certain types of labor which may have been specified in the standard labor mix. Capacity restraints such as these, and others, can force substitution. Poor production scheduling can also lead to mix variances and a shortage/unavailability of some of the materials specified in the standard mix may require the firm to substitute these standard mix products with alternative inputs. Unfavorable yield or output variances can be caused by faulty equipment, leading to lower output per unit of input; low-quality materials and labor can lead to spoilage and lower output. Improper production methods can also lead to poor quality output which cannot be sold, and must thus be written off as spoiled products. Also, an improper mix or material and/or labor can lead to wastage of input and a lack of a relative increase in output (an indictment on management, who should ensure proper planning and control.)
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