Catrina Krause is the manager of the Gordon Bagel Shop. The corporate office had budgeted her store to sell 3,000 ham sandwiches during the week beginning July 17. Each sandwich was expected to contain 6 ounces of ham. During the week of July 17, the store actually sold 3,500 sandwiches and used 21,100 ounces of ham. The standard cost of ham is $0.35 per ounce. The variance report from company headquarters showed an unfavorable materials usage variance of $1,085. Ms. Krause thought the variance was too high, but she had no accounting background and did not know how to register a proper objection.

a. Is the variance calculated properly? If not, recalculate it.
b. Provide three independent explanations as to what could have caused the materials usage variance that you determined in Requirement a.

  • CreatedFebruary 07, 2014
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