• The corporate office had budgeted Nestle Coffee Shop to sell 2,500 cappuccinos during the week beginning August 1. Each cappuccino was expected to contain 4 ounces of milk. During the week of August 1, the shop actually sold 2,800 cappuccinos and used 11,200 ounces of milk. The standard cost of milk is $0.35 per ounce. The variance report from company headquarters showed an unfavorable materials usage variance of $560.
• Required:
  1. Is the variance calculated properly? If not, recalculate it.
  2. Provide three independent explanations as to what could have caused the materials usage variance that you determined in Requirement 1.