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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. Mangia put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 700 pounds were tomato sauce, 840 pounds were cheese, and the remaining 460 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, 700 pounds were tomato sauce, 700 pounds were cheese, and 600 pounds were sausage? How would that affect the mix variance?

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Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663

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Chapter
Section
BuyFindarrow_forward

Cornerstones of Cost Management (C...

4th Edition
Don R. Hansen + 1 other
Publisher: Cengage Learning
ISBN: 9781305970663
Chapter 9, Problem 9CE
Textbook Problem
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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.

Chapter 9, Problem 9CE, Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia developed the

Mangia put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 700 pounds were tomato sauce, 840 pounds were cheese, and the remaining 460 pounds were sausage. The actual yield was 780 pizzas.

Required:

  1. 1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage.
  2. 2. Calculate the mix variance.
  3. 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. 4. What if of the total 2,000 pounds of ingredients put into process, 700 pounds were tomato sauce, 700 pounds were cheese, and 600 pounds were sausage? How would that affect the mix variance?

1.

To determine

Compute the standard mix (SM) in pounds for tomato sauce, for cheese and for sausage.

Explanation of Solution

Standard mix: Generally, standard mix particularly categorizes the proportion of each direct materials and the proportion of each type of direct labor used for producing the product.

The following formula is used to calculate standard mix:

 Standard mix =( Standard mix proportion ×Total actual input quantity)

The standard mix quantity is calculated for each input and the total actual input quantity is the total of the quantities of all inputs put into production.

Compute the standard mix (SM) in pounds for tomato sauce, for cheese and for sausage:

Standard mix for tomato sauce =( Standard mix proportion ×Total actual input quantity)=( 0.325×2,000 pounds of direct materials)=650 pounds

2.

To determine

Compute the mix variance.

3.

To determine

Compute the actual mix proportions used of tomato sauce, cheese and sausage and explain the direction (F or U) of the mix variance.

4.

To determine

Analyze the effect of mix variance if there is a change in actual input quantity of the direct materials used.

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Chapter 9 Solutions

Cornerstones of Cost Management (Cornerstones Series)
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