Question

1 Grains Galore Cereal Co.produces a cereal called Toasty Fruits,which is a mixof cranberries, raisins and rice flakes. It has set the following standards to produce 50 kilograms of cereal:

Ingredient

                                      Kilograms                Cost per kilogram          Total cost

Rice flakes                          30                                $2.00 $60.00

Raisins                                18                                $2.50                            $45.00

Cranberries                         12                                 $30.00                           360.00

                                             60                                                                      $465.00

                                                             Kilograms                Cost per kilogram               Total cost

Rice flakes                                                   30                                 $2.00                            $60.00

Raisins                                                        18                                  $2.50                            $45.00

Cranberries                                                 12                                 $30.00                       $360.00

                                                                     60                                                                   $465.00

At the end of the month, the operations manager reported the following details relating to the production of 2,600 kilograms of Toasty Fruits cereal:

Ingredients               Kilograms        Cost per kilogram        Total cost

Rice flakes                 1,820                       $1.85                              $3,367.00

Raisins                          910                          $2.60                   $ 2,366.00

Cranberries                 770                           $33.50                  $25,795.00

                                    3,500                                                      $31,528.00

All prices remained the same for the period and Grains Galore operates on a just-in-time inventory basiswith negligible beginning and ending inventories.What were the mix and yield variances for the month?

a)Mix variance, $1,684.80 U; Yield variance, $3,150.20 U

b)Mix variance, $1,890.00 U; Yield variance, $2,945.00 U

c)Mix variance, $1,890.00 U; Yield variance, $3,150.20 U

d)Mix variance, $2,110.50 U; Yield variance, $3,193.90 U

Answer 1