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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
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. Direct Material Mix Mix Proportion SP Standard Cost Tomato sauce 9.60 lbs $14.40 0.320 0.375 $1.50 2.90 Cheese 11.25 32.63 9.15 0.305 2.10 19.21 Sausage Total 30.00 lbs $66.24 Mangia put a batch of 2,000 pounds of direct materials (enough for 1,067 frozen sausage pizzas) into process. Of the total, 700 pounds were tomato sauce, 880 pounds were cheese, and the remaining 420 pounds were sausage. The actual yield was 770 pizzas. Required: 1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage. SM Tomato sauce pounds Cheese pounds Sausage pounds 2. Calculate the mix variance. $ Unfavorable 3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Actual mix proportion Tomato sauce % Cheese % Sausage % Using the results, would the direction of the mix variance be favorable or unfavorable? Unfavorable 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? The mix variance will be Favorable
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