GoodFoods 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, budgeted prices, and budgeted mix of direct materials are as follows:

Changing the standard mix of direct material quantities slightly does 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, GoodFoods made 100 batches of Tempting Trail Mix with the following actual quantity, cost, and mix of inputs:

Required

1. What is the budgeted cost of direct materials for the 100 batches?
2. Calculate the total direct materials efficiency variance.
3. Calculate the total direct materials mix and yield variances.
4. Illustrate the relationship between the variances calculated in requirements 2 and 3. What are the variances calculated in requirement 3 telling you about the 100 batches produced this period? Are the  variances large enough to investigate?

Transcribed Image Text:

Peanuts Dried cranberries Chocolate pieces Quantity per Batch 50 cups 30 cups 20 cups Price per Cup Budgeted Mix $1 $2 50% 30% 20%