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PROBLEM11-1. Material Variances. Hank's is a chain of 55 coffee shops. The standard amount of ground coffee per cup is .75 ounces. During the month of September, the company sold 325,000 cups of coffee (reported via electronic cash registers), and the 55 shops reported using 16,800 pounds of coffee. Also during September, the company purchased 19,000 pounds of coffee at a cost of $290,700. The standard price per pound is $15.
Required
A. Compute material price and quantity variances.?
B. Do either or both of the variances warrant investigation?
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