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Vegan Co

The document outlines the variances in material pricing and usage for Vegan Co, detailing both planning and operational variances for raw materials such as soya bean and sugar. It highlights the production manager's responsibility for material usage operational variance, which is reported as adverse due to potential inexperience, and the purchasing manager's role in managing material price variance. Overall, the performance of the production manager is deemed unsatisfactory, with concerns about compliance with government regulations regarding material mix.

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Nisna Nowrin
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18 views6 pages

Vegan Co

The document outlines the variances in material pricing and usage for Vegan Co, detailing both planning and operational variances for raw materials such as soya bean and sugar. It highlights the production manager's responsibility for material usage operational variance, which is reported as adverse due to potential inexperience, and the purchasing manager's role in managing material price variance. Overall, the performance of the production manager is deemed unsatisfactory, with concerns about compliance with government regulations regarding material mix.

Uploaded by

Nisna Nowrin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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VEGAN CO :

a)
1) material price planning variance

raw material spo


soya bean 5.9
sugar 1.8

2) material price operational variance

raw material spr


soya beam 5.31
sugar 2.16

3) material usage planning variance

sq - aq * std price

rw material sqo
soya 96000
sugar 5760

4) material usage operational variance

rw material sqr
soya 91200
sugar 4800

b) manager workings
production soya bean : std
mix soya bean -
(190/200) = 95%
actual mix :
94000/99280 =
94.7
sugar -
std mix : (10/200)
= 5%
5280/99280 =
5.31%
purchasing
spr aq variance
5.31 94000 55460 F
2.16 5280 -1900.8 F
53559.2 F

ariance

ap aq variance
5.7 94000 -36660 A
1.9 5280 1372.8 A
-35287.2 A

sqr std price variance


91200 5.9 28320 F
4800 1.8 1728 F
30048 F

variance

aq used std price variance


94000 5.9 -16520 A
5280 1.8 -864 A
-17384 A

comment
prdn mnger is responsible for
the product mix at vegan co.
production manager is only
responsible for material usage
operational variance as
planning variance is not under
the control of pdn manager.
Material usage operationa
variance is 17385 adverse
which is bad for the company.
this could be due inexperience
of manager and the pdn team
in the revised pdn mix whcih
wd hv lead to adverse use of
materials. the alarming part is
that actual mix used by the
pdn manager for sugar (5.31%)
is greater than the allowed mix
by the govt this can lead to
possible fines and penalties for
whcih pdn manager is
responsible. from the above
perfroance of pdn manager is
not satisfactory but this might
be impred wih experience in
the new mix
purchase manager is
responsible for material price
variance as he has control for
negotiating prices with
supplier. Purchase mabager is
also not responsible for materia
price planning variance as it
does not have the control over
the same. Material price
operational variance of $35287
adverse whcih is not goof for
the co. this ccd be due to

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