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Stench Foods Company

Stench Foods Company uses a standard cost system to collect costs related to the production of its garlic flavored yogurt. The garlic (materials) standards for each container of yogurt produced are 0.8 ounces of crushed garlic at a standard cost of $2.30 per ounce.

During the month of June, Stench purchased 75,000 ounces of crushed garlic at a total cost of $171,000. Stench used 64,000 of these ounces to produce 71,500 containers of yogurt.

What is Stench's materials price variance for the month of June?
$23,800 favorable
$1,500 favorable
$17,250 favorable
$15,640 unfavorable

Solution Preview

The Standard Cost per ounce is $2.3, while the Actual cost per ounce = $17,000/75,000 = ...

Solution Summary

This solution calculations the variation between budgeted and actual standard total cost.