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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 8
CALCULATING THE DIRECT MATERIALS MIX VARIANCE
Pronto Pizza Company makes frozen pizzas that are sold through grocery stores. Pronto developed the following standard mix for spreading on premade pizza shells to produce 16 giant-size sausage pizzas.
Pronto put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 460 pounds were tomato sauce, 1,040 pounds were cheese, and the remaining 500 pounds were sausage. The actual yield was 780 pizzas.
Required:
1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage.
2. Calculate the mix variance.
3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Use these results to explain the direction (favorable or unfavorable) of the mix variance. 4. What if of the total 2,000 pounds of ingredients put into process, 600 pounds were tomato sauce, 900 pounds were cheese, and 500 pounds were sausage? How would that affect the mix variance?
Pronto Pizza Company makes frozen pizzas that are sold through grocery stores. Pronto developed the following standard mix for spreading on premade pizza shells to produce 16 giant-size sausage pizzas.
Pronto put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 460 pounds were tomato sauce, 1,040 pounds were cheese, and the remaining 500 pounds were sausage. The actual yield was 780 pizzas.
Required:
1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage.
2. Calculate the mix variance.
3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Use these results to explain the direction (favorable or unfavorable) of the mix variance. 4. What if of the total 2,000 pounds of ingredients put into process, 600 pounds were tomato sauce, 900 pounds were cheese, and 500 pounds were sausage? How would that affect the mix variance?
Explanation
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Verified
1.
2. The below table shows the ca...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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