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: (Do not round intermediate calculations.) Standard Actual Number of roses per arrangement 17 17.1 Price per rose $ 1.70 $ 1.68 The company made and sold 450 of the Valentine's Day arrangements. Based on this information the materials usage variance was Multiple Choice $154 Favorable. $154 Unfavorable. $76.5 Favorable. $76.5 Unfavorable.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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: (Do not round intermediate calculations.)
| Standard | Actual | |||||
| Number of roses per arrangement | 17 | 17.1 | ||||
| Price per rose | $ | 1.70 | $ | 1.68 | ||
The company made and sold 450 of the Valentine's Day arrangements. Based on this information the materials usage variance was
-
$154 Favorable.
-
$154 Unfavorable.
-
$76.5 Favorable.
-
$76.5 Unfavorable.
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