Question

Calculating the Yield 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 17 giant-size sausage pizzas. Direct Material Mix SP Standard Cost Tomato sauce 10 lbs. $1.40 $14.00 Mix Proportion 0.330 0.360 0.310 Cheese 11 2.70 29.70 Sausage 2.10 18.90 Total 30 lbs. $62.60 Mangia put a batch of 2,000 pounds of direct materials (enough for 1,133 frozen sausage pizzas) into process. Of the total, 620 pounds were tomato sauce, 820 pounds were cheese, and the remaining 560 pounds were sausage. The actual yield was 750 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 1,158 pizzas? How would that affect the yield variance? The yield variance would be

Answer 1

1.

• Actual output with actual inputs= 750 pizzas
• Standard output with actual inputs= 1,133 pizzas
• Yield ratio = 750/1133 = 0.66

2. Standard Cost of 17 Pizzas = $ 62.60. So, Std Cost of one pizza =62.60/17 = 3.68

3. Standard Yield for actual input of 2,000 lbs of direct materials:

Since as per standard, 30 lbs of input produces 17 pizzas

So,standard yield for actual input of 2,000 lbs = 2000*17/30 = 1133 Pizzas

4.Standard Quantity for actual output:
Tomato Sauce= (10/17)*750 = 441.18 lbs
Cheese= (11/17)*750= 485.29 lbs
Sausage= (9/17)*750= 397.05 lbs

Revised Actual Quantity:
Total input of 2000 lbs divided in the standard ratio of 10:11:9
Tomato Sauce= 10/30 * 2,000 = 666.67 lbs
Cheese= 11/30 * 2,000 = 733.33 lbs
Sausage= 9/30 * 2,000 = 600 lbs

Yield Variance
Material	SQ * SP (1)	RAQ * SP (2)	Variance (1-2)
Tomato Sauce	441.18*1.4 = 617.65	666.67*1.4= 933.33	315.68 (U)
				Cheese	485.29 * 2.7 = 1310.28	733.33*2.7 = 1980	669.72 (U)
Sausage	397.05*2.1 = 833.81	600*2.1 = 1260	426.19 (U)
				Total	$2,761.74	$4,173.33	1411.59 (U)

5.

Yield Variance
Material	SQ * SP (1)	RAQ * SP (2)	Variance (1-2)
Tomato Sauce	1158*10/17*1.4 = 95.65	933.34	20.31 (F)
				Cheese	1158*11/17*2.7 = 2023.09	1980	43.09 (F)
Sausage	1158*9/17*2.1 = 1287.42	1260	27.42 (F)
				Total	$4,264.17	$4,173.34	90.83 (F)

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