Question

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

Answer 1

Hence, the materials usage variance is $122 favorable

Step-by-step 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