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	12.80 lbs	0.320	$1.50	$19.20
Cheese	14.40	0.360	2.80	40.32
Sausage	12.80	0.320	2.10	26.88
Total	40.00 lbs			$86.40

Mangia put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 600 pounds were tomato sauce, 820 pounds were cheese, and the remaining 580 pounds were sausage. The actual yield was 760 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, 600 pounds were tomato sauce, 600 pounds were cheese, and 800 pounds were sausage? How would that affect the mix variance? The mix variance will be Favorable