Materials Yield Variance – This is the sub-variance of material usage variance. It results from the difference between actual yield and standard yield. It may be defined as that portion of the direct materials usage variance which is due to the standard yield specified and the actual yield obtained. It may arise due to low quality of materials, defective methods of production, carelessness in handling materials, etc.
Material yield variance is calculated with the following formula:
=Standard Rate (Actual yield – Standard yield)