Tropical Fruits Inc. processes tropical fruit into a fruit salad mix, which it sells to a food-service company. Tropical Fruits has in its budget the following standards for the direct materials inputs to produce a batch of 80 kilograms of tropical fruit salad:
Note that 100 kilograms of input quantities are required to produce 80 kilograms of fruit salad. No inventories of direct materials are kept. Purchases are made as needed, so all price variances are related to direct materials used. The actual direct materials inputs used to produce 54,000 kilograms of tropical fruit salad for October were:
1. Compute the total direct materials price and efficiency variances in October.
2. Compute the total direct materials mix and yield variances for October.
3. Comment on your results in requirements 1 and 2.
4. How might the management of Tropical Fruits Inc. use information about the direct materials mix and yield variances?

  • CreatedJuly 31, 2015
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