Mangia Pizza Company makes frozen pizzas that are sold through
Mangia Pizza Company makes frozen pizzas that are sold through
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 16 giant-size sausage pizzas.
Mangia’s recent batch (designed to produce 400 pizzas) used 400 direct labor hours. Of the total, 160 were for machine operators, and the remaining 240 hours were for packers. The actual yield was 780 pizzas.
Required:
1. Calculate the standard mix (SM) in hours for machine operators and for packers.
2. Calculate the mix variance.
3. Calculate the actual proportion of hours worked by machine operators and by packers. Use these results to explain the direction (favorable or unfavorable) of the mix variance.
4. What if of the total 400 direct labor hours worked, 200 were worked by each type of direct labor? How would that affect the mix variance?