Responsibility for materials usage variance Lehman Fruit Basket Company makes baskets of assorted fruit. The standard and

Question:

Responsibility for materials usage variance Lehman 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 Price per orange 4.50 X $0.28 $1.26 6.30 X $0.25 Cost of oranges pe

Lehman actually produced 25,000 baskets.
Required
a. Determine the materials price variance and indicate whether it is favorable (F) or unfavorable (U).
b. Determine the materials usage variance and indicate whether it is favorable (F) or unfavorable (U).
c. Explain why the purchasing agent may have been responsible for the usage variance.