Mathematics · Cost Accounting
In Month 5, Romeo Co. reported a favourable materials mix variance for the basic tomato pizza. Which of the following statements explains why this variance occurred?
- 1The proportion of relatively expensive ingredients used in production was less than the standard proportion✓
- 2The prices paid for the ingredients used in the mix were lower than the standard prices
- 3Each pizza used less of all the ingredients in actual production than expected
- 4More pizzas were produced than expected given the level of ingredients input
Correct answer
The proportion of relatively expensive ingredients used in production was less than the standard proportion
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