COST ACCOUNTING
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ISBN: 9781323927397
Author: Pearson
Publisher: PEARSON
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Chapter 7, Problem 7.40P
Direct materials efficiency, mix, and yield variances. Sandy’s Snacks produces snack mixes for the gourmet and natural foods market. Its most popular product is Tempting Trail Mix, a mixture of peanuts, dried cranberries, and chocolate pieces. For each batch, the budgeted quantities and budgeted prices are as follows:
| Quantity per Batch | Price per Cup | |
| Peanuts | 60 cups | $1 |
| Dried cranberries | 30 cups | $2 |
| Chocolate pieces | 10 cups | $3 |
Small changes to the standard mix of direct materials reflected in the above quantities do not significantly affect the overall end product. In addition, not all ingredients added to production end up in the finished product, as some are rejected during inspection.
In the current period, Sandy’s Snacks made 100 batches of Tempting Trail Mix with the following actual quantity, cost, and mix of inputs:
- 1. What is the budgeted cost of direct materials for the 100 batches?
Required
- 2. Calculate the total direct materials efficiency variance.
- 3. Calculate the total direct materials mix and yield variances.
- 4. How do the variances calculated in requirement 3 relate to those calculated in requirement 2? What do the variances calculated in requirement 3 tell you about the 100 batches produced this period? Are the variances large enough to investigate?
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Direct materials efficiency, mix, and yield variances. Sandy’s Snacks produces snack mixes for the gourmet and natural foods market. Its most popular product is Tempting Trail Mix, a mixture of peanuts, dried cranberries, and chocolate pieces. For each batch, the budgeted quantities and budgeted prices are as follows:
Flexible Budgeting and Variance Analysis
Sharon’s Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:
Line Item Description
Standard Amount per CaseDark Chocolate
Standard Amount per CaseLight Chocolate
Standard Price per Pound
Cocoa
10 lbs.
7 lbs.
$4.20
Sugar
8 lbs.
12 lbs.
0.60
Standard labor time
0.3 hr.
0.4 hr.
Line Item Description
Dark Chocolate
Light Chocolate
Planned production
4,500 cases
12,800 cases
Standard labor rate
$14.00 per hr.
$14.00 per hr.
Sharon’s Delights Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, Sharon’s Delights Chocolate Company had the following actual results:
Line Item Description
Dark Chocolate
Light Chocolate
Actual production (cases)
4,300
13,300
Line Item Description
Actual Price per Pound
Actual…
Flexible Budgeting and Variance Analysis
I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:
Standard Amount per Case
Dark Chocolate
Light Chocolate
Standard Price per Pound
Cocoa
12 lbs.
8 lbs.
$7.25
Sugar
10 lbs.
14 lbs.
1.40
Standard labor time
0.50 hr.
0.60 hr.
Dark Chocolate
Light Chocolate
Planned production
4,700 cases
11,000 cases
Standard labor rate
$15.50 per hr.
$15.50 per hr.
I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:
Dark Chocolate
Light Chocolate
Actual production (cases)
5,000
10,000
Actual Price per Pound
Actual Pounds Purchased and Used
Cocoa
$7.33
140,300
Sugar
1.35
188,000
Actual Labor…
Chapter 7 Solutions
COST ACCOUNTING
Ch. 7 - What is the relationship between management by...Ch. 7 - What are two possible sources of information a...Ch. 7 - Distinguish between a favorable variance and an...Ch. 7 - What is the key difference between a static budget...Ch. 7 - Why might managers find a flexible-budget analysis...Ch. 7 - Describe the steps in developing a flexible...Ch. 7 - List four reasons for using standard costs.Ch. 7 - How might a manager gain insight into the causes...Ch. 7 - List three causes of a favorable direct materials...Ch. 7 - Describe three reasons for an unfavorable direct...
Ch. 7 - How does variance analysis help in continuous...Ch. 7 - Why might an analyst examining variances in the...Ch. 7 - Prob. 7.13QCh. 7 - When inputs are substitutable, how can the direct...Ch. 7 - Benchmarking against other companies enables a...Ch. 7 - Metal Shelf Companys standard cost for raw...Ch. 7 - All of the following statements regarding...Ch. 7 - Amalgamated Manipulation Manufacturings (AMM)...Ch. 7 - Atlantic Company has a manufacturing facility in...Ch. 7 - Basix Inc. calculates direct manufacturing labor...Ch. 7 - Flexible budget. Sweeney Enterprises manufactures...Ch. 7 - Flexible budget. Bryant Companys budgeted prices...Ch. 7 - Flexible-budget preparation and analysis. Bank...Ch. 7 - Flexible budget, working backward. The Clarkson...Ch. 7 - Flexible-budget and sales volume variances....Ch. 7 - Price and efficiency variances. Sunshine Foods...Ch. 7 - Materials and manufacturing labor variances....Ch. 7 - Direct materials and direct manufacturing labor...Ch. 7 - Price and efficiency variances, journal entries....Ch. 7 - Materials and manufacturing labor variances,...Ch. 7 - Journal entries and T-accounts (continuation of...Ch. 7 - Price and efficiency variances, benchmarking....Ch. 7 - Static and flexible budgets, service sector....Ch. 7 - Flexible budget, direct materials, and direct...Ch. 7 - Variance analysis, nonmanufacturing setting. Joyce...Ch. 7 - Comprehensive variance analysis review. Ellis...Ch. 7 - Possible causes for price and efficiency...Ch. 7 - Material-cost variances, use of variances for...Ch. 7 - Direct manufacturing labor and direct materials...Ch. 7 - Direct materials efficiency, mix, and yield...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Direct materials and manufacturing labor...Ch. 7 - Use of materials and manufacturing labor variances...Ch. 7 - Direct manufacturing labor variances: price,...Ch. 7 - Direct-cost and selling price variances. MicroDisk...Ch. 7 - Variances in the service sector. Derek Wilson...Ch. 7 - Prob. 7.47P
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