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hello tutor
can you please help meRomeo Co is a business which makes and sells fresh pizza from a number of mobile food
vans based at several key locations in the city centre. It offers a variety of toppings and
dough bases for the pizzas and has a good reputation for providing a speedy service
combined with hot, fresh and tasty food to customers.
Each van employs a chef who is responsible for making the pizzas to Romeo Co’s recipes
and two sales staff who serve the customers. All purchasing is done centrally to enable
Romeo Co to negotiate bulk discounts and build relationships with suppliers.
Romeo Co operates a standard costing and variances system and the standard cost card for
Romeo Co’s basic tomato pizza is as follows:
Ingredient Weight Price
(kg) ($ per kg)
Dough 0.20 7.60
Tomato sauce 0.08 2.50
Cheese 0.12 20.00
Herbs 0.02 8.40
–––––
0.42
–––––5 Based on the above information about Month 6, which of the following statements
are correct?
(1) The actual cost per pizza in Month 6 was lower than the standard cost per
pizza.
(2) The sales staff should lose their Month 6 bonus because of the reduced sales.
(3) The value of the ingredients usage variance and the mix variance are the same.
(4) The new chef will be responsible for the material price, mix and yield
variances.A (3) and (4)
B (1) and (2)
C (1) and (3)
D (2) and (4)I would like to know how come mix and usage variance are same since the question does not give us any information in full about the mix and yield ?
and even if we work out by our own it will be time consuming and it will take long time and not worthy enough for 2 marks
You have not typed out the whole question. The question goes on to say that in Month 6 they made 100 pizzas using a total of 42 kg of ingredients.
The standard weight per pizza is 0.42 kg, and therefore the standard weight for 100 pizzas is 100 x 0.42 = 42 kg.
The actual weight of the pizzas was also 42 kg, and therefore the yield variance is zero.
Given that the usage variance = mix variance + yield variance, then since the yield variance = 0, the usage variance must be equal to the mix variance.
Do watch my free lectures on mix and yield variances, because I do explain this point.
The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.” The standard weight per pizza is 0.42 kg, and therefore the standard weight for 100 pizzas is 100 x 0.42 = 42 kg.”
I am sorry for not writing the whole question.
however, I am glad you still able to help me outyes you explained it perfectly thank you tutor.
btw tutor
I have not received any email for the response made by you for this question.
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