Study the scenario and complete the question that follows: Chopper Ltd Chopper Ltd manufactures confectionery food in the North West province and it has been supplying the whole province for the past ten years. They manufacture a popular sweet for kids called ‘Dama’, which requires three ingredients: Hola, Suca, and Sira. Since the appointment of Ms Stellah as the production manager three years ago, after she completed her Master’s degree in Management and Costing Accounting from Pearson Institute of Higher Education, she had adopted the use of standard costing system to monitor its costs. The standard materials usage and cost for one unit of ‘Dama’ is as follows: Hola: 25 grams at 3 cents per gram Suca: 20 grams at 4 cents per gram Sira: 15 grams at 3½ cents per gram At the end of 31 August 2020, Chopper Ltd produced 120 000 units of ‘Dama’ using 4 000 kilograms of Hola, 1 680 kilograms of Suca, and 2 000 kilograms of Sira. Required: Calculate the material variances (usage, mix, and yield variances) for the company and comment on the performance of the organization. Be sure to clearly calculate individual and total variances for each ingredien
Study the scenario and complete the question that follows:
Chopper Ltd
Chopper Ltd manufactures confectionery food in the North West province and it has been supplying the
whole province for the past ten years. They manufacture a popular sweet for kids called ‘Dama’, which
requires three ingredients: Hola, Suca, and Sira. Since the appointment of Ms Stellah as the production
manager three years ago, after she completed her Master’s degree in Management and Costing
Accounting from Pearson Institute of Higher Education, she had adopted the use of
system to monitor its costs. The standard materials usage and cost for one unit of ‘Dama’ is as follows:
Hola: 25 grams at 3 cents per gram
Suca: 20 grams at 4 cents per gram
Sira: 15 grams at 3½ cents per gram
At the end of 31 August 2020, Chopper Ltd produced 120 000 units of ‘Dama’ using 4 000 kilograms of Hola, 1 680 kilograms of Suca, and 2 000 kilograms of Sira.
Required:
Calculate the material variances (usage, mix, and yield variances) for the company and comment
on the performance of the organization. Be sure to clearly calculate individual and total variances
for each ingredient.
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