Chapter 9, Problem 9CE

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 16 giant-size sausage pizzas.

Mangia put a batch of 2,000 pounds of direct materials (enough for 800 frozen sausage pizzas) into process. Of the total, 700 pounds were tomato sauce, 840 pounds were cheese, and the remaining 460 pounds were sausage. The actual yield was 780 pizzas.

Required:

1. 1. Calculate the standard mix (SM) in pounds for tomato sauce, for cheese, and for sausage.
2. 2. Calculate the mix variance.
3. 3. Calculate the actual proportion used of tomato sauce, cheese, and sausage. Use these results to explain the direction (favorable or unfavorable) of the mix variance.
4. 4. What if of the total 2,000 pounds of ingredients put into process, 700 pounds were tomato sauce, 700 pounds were cheese, and 600 pounds were sausage? How would that affect the mix variance?