Question
ohns Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate
ohns Weed-B-Gone yard service sprays lawns to rid them of weeds. John mixes the two chemicals, Weed-X and Pest-O, in proportions depending on the climate and the particular weed problems of the season. A standard mix calls for a gallon of the mixture to combine equal parts of Weed-X and Pest-O. Weed-X has a standard cost of $9.80 per gallon and Pesto-O has a standard cost of $25.00 per gallon. Each gallon can treat 100 square yards of lawn. John expects to treat 536,000 square yards of lawn.
For the past season, John treated 653,000 square yards. He used 3,300 gallons of Weed-X and 3,100 gallons of Pest-O. He paid a total of $30,030 for the Weed-X and $76,260 for the Pest-O.
Required:
a. Compute the materials price and efficiency variances for the season.
b. Compute the materials mix and yield variances for the season.
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $48. The a la carte option has a budgeted average price of $37 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $28 and the a la carte option averages $23 per meal in budgeted variable cost. The manager estimates that 2,600 people will order a meal in any month.
For July, the restaurant served a total of 2,400 meals, including 940 buffet options. Total revenues were $46,060 for buffet meals and $56,940 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
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