Required: 1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage. SM |x pounds |x pounds |x pounds Tomato sauce Cheese Sausage 2. Calculate the mix variance. |x Unfavorable 3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Actual mix proportion Tomato sauce X % Cheese X % Sausage X %
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Calculating the Direct Materials Mix Variance
Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia developed the following standard mix for spreading on premade pizza shells to produce 16 giant-size sausage pizzas.
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