Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and...

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $7.20 per pizza. At the end of June, Southside actually sold 1,100 pizzas and the actual cost of the cheese that it used during the month was $3,102.

Required:

Assume that the company establishes a price standard of $0.90 per ounce for mozzarella cheese and a quantity standard of eight ounces of cheese per pizza. Also, assume that Southside actually used 9,400 ounces of cheese during the month to make 1,100 pizzas.

a. What is the materials price variance for mozzarella cheese for June?

b. What is the materials quantity variance for mozzarella cheese for June?

c. What is the materials spending variance for mozzarella cheese for June?

Solutions

Expert Solution

a. What is the materials price variance for mozzarella cheese for June?

Answer: $5,358

b. What is the materials quantity variance for mozzarella cheese for June?

Answer: -$540

c. What is the materials spending variance for mozzarella cheese for June?

Answer: $4,818

Particulars	Amount
Actual quantity	9,400	ounce	(a)
Standard price	0.90	per ounce	(b)
Actual quantity * Standard price	$8,460		(c=b*a)
Actual cost	$3,102		(d)
Price variance	$5,358		(e=c-d)

Standard quantity	8,800	ounce	(f=8 ounce*1100 pizza)
Standard quantity * Standard price	7,920		(g=f*b)
Quantity variance	-$540		(h=g-c)


Spending variance	$4,818		(g-d)

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and...

Southside Pizzeria wants to improve its ability to manage the ingredient costs associated with making and selling its pizzas. For the month of June, the company plans to make 1,000 pizzas. It has created a planning budget that includes a cost formula for mozzarella cheese of $2.40 per pizza. At the end of June, Southside actually sold 1,100 pizzas and the actual cost of the cheese that it used during the month was $2,632. Required: 1. What is the mozzarella...

If education is provides that ability for a nation to improve its' economic outlook, why do...

If education is provides that ability for a nation to improve its' economic outlook, why do we make access to education such a high barrier in terms of cost? There has been some discussion of late that we should consider free community college education for all students. What are your thoughts about free community college education?

A bank wants to use direct refinancing to manage its duration gap, DG. Currently, for its...

A bank wants to use direct refinancing to manage its duration gap, DG. Currently, for its assets, loans = $22 million and cash = $6 million. Equity = $4 million. Average DA = 2.75 years, and average DL = 4 years. a) Should the bank buy loans with cash or sell existing loans for cash to reduce its interest risk? b) What is the duration of the bank's existing loans? c) How much cash will be used to eliminate the...

Glascro Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated...

Glascro Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected as follows: Month Lease cost Machine hours April $15,000 800 May 10,000 600 June 12,000 770 July 16,000 1,000 Using the high-low method, calculate the fixed cost of leasing. a.$1,500 b.$2,500 c.$1,000 d.$2,000

How might the global digital divide affect a low-income country’s ability to improve its global economic...

How might the global digital divide affect a low-income country’s ability to improve its global economic standing? Explain how this might affect the country’s ability to be competitive in a global marketplace.

Item 1: Entity A purchased land adjacent to its plant to improve access for trucks making...

Item 1: Entity A purchased land adjacent to its plant to improve access for trucks making deliveries. Expenditures incurred in purchasing the land were as follows: Purchase price $55,000 Broker’s fees 6,000 Title search and other fees 5,000 Demolition of an old building on the property, 5,700 Grading 1,200 Digging foundation for the road 3,000 Laying and paving driveway 25,000 Lighting 7,500 Signs 1,500. List the items and amounts that should be included in the Land account. Item 2: Equipment...

34. With regard to quality, the costs that a company must emphasize to improve its quality...

34. With regard to quality, the costs that a company must emphasize to improve its quality are: to. External failure costs b. Internal failure costs c. Assessment costs d. Prevention costs Questions 35-40. Classify the mentioned costs using the following letters: to. Prevention b. Evaluation c. Internal failure d. External failure 35. Inspect purchased raw material when it arrives at the factory. 36. Honor a customer's warranty for a defective product 37. Repair defective products before selling them (rework) 38....

Product X is selling for $40/unit. Its variable costs are $20/unit. Fixed costs associated with this...

Product X is selling for $40/unit. Its variable costs are $20/unit. Fixed costs associated with this product are $300,000/year. The company expects to sell 250,000 of Product X a year. What is the current annual profit of Product X? What is the breakeven point in units for Product X? Suppose the company decides it wants to charge a 20% markup on cost. What would the target return price of Product X be? The company decides not to change the price...

The CFO of Roland GmbH wants to improve its new production plant and has two mutually...

The CFO of Roland GmbH wants to improve its new production plant and has two mutually exclusive alternatives to choose from: The first option would be to enlarge the plant and buy a new building. This involves an initial cost of $2,900,000 and is expected to generate $140,000 a month in revenue for the next 2 years at a discount rate of 9.5% compounded annually. Alternatively, the company could invest the $2,900,000 in the stock market at an expected return...

4. The board wants to adopt a restrictive short-term financial policy to improve on its cash...

4. The board wants to adopt a restrictive short-term financial policy to improve on its cash management. Identify three aspects of restrictive short-term financial policy the company should consider.

Subjects