60.1K

Verified Solution

Link Copied!

Calculating the Direct Labor Mix Variance

Mangia Pizza Company makes frozen pizzas that are sold through grocery stores. Mangia uses two types of direct labor: machine operators and packers. Mangia developed the following standard mix for spreading on premade pizza shells to produce 18 giant-size sausage pizzas.

Direct Labor	Mix		Mix Proportion	SP	Standard Cost
Machine operators	0.5	hr.	0.50	$18	$ 9.00
Packers	0.5		0.50	10	5.00
Total	1.0	hr.			$14.00

Mangia's recent batch (designed to produce 300 pizzas) used 300 direct labor hours. Of the total, 120 were for machine operators, and the remaining 180 hours were for packers. The actual yield was 780 pizzas.

Required:

Instructions for parts 2 and 3: If a variance is zero, enter "0" and select "Not applicable" from the drop down box.

1. Calculate the standard mix (SM) in hours for machine operators and for packers.

	SM
Machine operators	hours
Packers	hours

2. Calculate the mix variance.

$

3. Calculate the actual proportion of hours worked by machine operators and by packers. Enter the percentages as whole numbers.

	Actual mix proportion
Machine operators	%
Packers	%

Using the results, would the direction of the mix variance be favorable or unfavorable?

Answer & Explanation Solved by verified expert

See Answer