Tropica AB processes tropical fruit into fruit salad mix, which it sells to a food-service company. Tropica
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Tropica AB processes tropical fruit into fruit salad mix, which it sells to a food-service company.
Tropica has in its budget the following standards for the direct materials inputs to produce 80 kg of tropical fruit salad:
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50 kg of pineapple at SFr 1.00 per kg 30 kg of watermelon at SFr 0.50 per kg 20 kg of mango at SFr 0.75 per kg 100 SFr 50 15 15 SFr 80 Note that 100 kg of input quantities are required to produce 80 kg of fruit salad. No stocks 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 kg of tropical fruit salad for the month of October were: 36 400 kg of pineapple at SFr 0.90 per kg 18 200 kg of watermelon at SFr 0.60 per kg 15 400 kg of mango at SFr 0.70 per kg 70 000 SFr 32 760 10 920 10 780 SFr 54 460 Required 1 Calculate the total direct materials price and efficiency variances in October. 2 Calculate the total direct materials yield and mix variances for October. 3 Comment on your results in requirements 1 and 2. 4 How might the management of Tropica use information about the direct materials yield and mix variances?
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Related Book For
Management And Cost Accounting
ISBN: 9781292436029
8th Edition
Authors: Alnoor Bhimani, Srikant Datar, Charles Horngren, Madhav Rajan
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