Question

1. 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 18 giant-size sausage pizzas.

   Direct Material	Mix		Mix Proportion			SP			Standard Cost
   Tomato sauce	10	lbs.		0.335			$1.50			$15.00
   Cheese	11			0.375			2.80			30.80
   Sausage	9			0.290			2.00			18.00
   Total	30	lbs.								$63.80

   Mangia put a batch of 2,000 pounds of direct materials (enough for 1,200 frozen sausage pizzas) into process. Of the total, 600 pounds were tomato sauce, 840 pounds were cheese, and the remaining 560 pounds were sausage. The actual yield was 760 pizzas.

   Required:

   1. Calculate the yield ratio based on the standard amounts given. If required, round your answer to two decimal places. ________

   2. Calculate the standard cost per pound of the yield. If required, round your answer to the nearest cent.
   $__________ per pizza

   3. Calculate the standard yield for actual input of 2,000 pounds of direct materials. Do not round intermediate calculations. Round your final answer to nearest whole number.
   ___________ pizzas

   4. Calculate the yield variance. Do not round intermediate calculations, except for number of pizzas which should be rounded to nearest whole number. If required, round your final answer to the nearest cent.
   $__________   

   5. What if the total 2,000 pounds of direct materials put into process resulted in a yield of 1,225 pizzas? How would that affect the yield variance?

   The yield variance would be Favorable or Unfavorable?

Answer 1

Sol//:

(1) Calculation of yield Ratio on the standard amount give :

Yield Ratio = standard yield /total yield

Standard yield =1200 . Total yield = 2000

= 1200/2000 = 0.60

Yield ratio =0.60

(2)calculation ofstandard cost per pound of yield  

given : standard cost of 18 pizzas is 63.80

Therefore standard cost of per pound of yield  will be

$ 63.80/18 =$3.54 per pizza

(3) calculate standard yield for actual input of 2000 pounds  

It is given that 30 lbs of input produces 18 pizzas

Then 2000 *18/30 = 1200 pizzas

(4) calculation of yield variance  

Yield variance

=(actual yield-standard yield )standard cost per pound of yield  

Actual yield = 760 standard yield =1200

Standard cost per pound of yield = 3.54

=(760-1200)3.54=(-440)$3.54 =$ -1557

Yield variance is ($1557) unfavorable  

(5) effect of yield variance

if actual yield variance is$ 1225

Standard variance is 1200

Yield variance

= (actual variance -standard variance )standard cost per pound of yield

= (1225-1200)3.54 =25*3.54 =$ 88.50

Yield variance $ 88.50 favorable