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24 October, 00:39

Roses, Incorporated made a batch of flower arrangements that were sold to grocery stores for Valentine's Day. The standard and actual costs of the roses used in each arrangement are as follows: Standard Actual Number of roses per arrangement 6 6.1 Price per rose $ 0.60 $ 0.58 The company made and sold 1,000 of the Valentine's Day arrangements. Based on this information the materials price variance was

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  1. 24 October, 02:11
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    Hence, the materials usage variance is $122 favorable

    Explanation:

    Material Price variance : The computation of material usage variance is shown below:

    = (Standard Price - Actual Price) * Actual Quantity of rose

    where,

    Actual Quantity = Sale units * Actual number of rose per arrangement

    = 1,000 * 6.1

    = 6,100 rose

    So,

    Material Price Variance = (0.60 - 0.58) * 6100

    = $122 favorable

    Hence, the materials usage variance is $122 favorable
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