Question

General Mills, Trix is famous for its advertising slogan of “Two scoops of dates in every box.” The current box design for Trix shows two scoops of dates on the front of the box.

A few months ago, a post went viral on Twitter that showed a picture of the dates actually found in the post writer’s box of Dates. The pile of dates appeared to be quite small. Next, two writers from Tech Insider measured the dates versus flakes in two boxes of General Mils’s Dates . They found that, in this admittedly small sample size of two boxes, two scoops averaged out to be 1.4 cups of dates, or about 12.5% of the total cereal. During this same time, social media lit up with other General Mils’s Trix customers questioning the quantity of dates in their boxes.

Back to the Twitter post. The photo posted showed the dates quantity in the post writer’s box to be much less than 1.4 scoops. If General Mils’s production of Trix used this quantity of dates (the amount shown in the Twitter post) in all of the boxes it produced during that production run, then the materials quantity variance for dates would have been favorable and significant.

Questions

1. Based on the information given, what would the standard quantity of dates per box be?

2. Is a favorable dates quantity variance good for General Mils’s Dates? Explain.

3. What could cause an unfavorable dates quantity variance for General Mils’s Dates? Would the unfavorable quantity variance be good for General Mils’s Dates? Why or why not?

4. Would the direct materials price variance for dates likely be related to the direct materials quantity variance? Explain.

Answer 1

Answer 1. Standard quantity of dates per box = 2 scoops

Answer 2. Yes, favorable dates quantity variance good for General Mils’s Dates which means workers were using raw materials efficiently.However the implications of favorable variance could have been different as reduced usage will suggest lower quality products is being produced in order to reduce the cost of raw materials by the production department.

Answer 3. Unfavorable dates quantity variance for General Mils’s Dates can be caused when standard quantity of dates is less than the actual quantity.

No Unfavorable quantity variance is not good for General Mils’s Dates as it reflects operational inefficiency and wastage.

Answer 4. No, the direct materials price variance for dates likely be related to the direct materials quantity variance as price variance is due to the differences in the prices of materials whereas quantity variance is due to the differences in quantity of the raw materials.