Baird Fruit Basket Company makes baskets of assorted fruit. The standard and actual costs of oranges...

Baird Fruit Basket Company makes baskets of assorted fruit. The standard and actual costs of oranges used in each basket of fruit follow.

	Standard		Actual
Average number of oranges per basket		5.10		6.80
Price per orange	× $	0.30	× $	0.25
Cost of oranges per basket	$	1.53	$	1.70

Baird actually produced 25,200 baskets.

Required

Determine the materials price variance and indicate whether it is favorable (F) or unfavorable (U).
Determine the materials usage variance and indicate whether it is favorable (F) or unfavorable (U).

Expert Solution

Requirement 1, with calculation

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$ 0.30	-	$ 0.25	)	x	171360
	8568
	Variance		$ 8,568.00			Favourable-F

Requirement 2

Material Usage Variance
(	Standard Quantity = 25200 units x 5.10	-	Actual Quantity = 25200 units x 6.80	)	x	Standard Rate
(	128520	-	171360	)	x	$ 0.30
	-12852
	Variance		$ 12,852.00			Unfavourable-U

ekkarill92 answered 1 year ago

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