Carlton Corporation
Carlton Corporation produces and sells faux-leather handbags. In the current year, the company budgeted for the production and sale of 1000 handbags; however, 900 handbags were actually produced and sold. Each bag has a standard requiring 2 metres of material at a cost of $4.00 per metre and 1 hour of assembly time at a cost of $9.50 per hour. Actual costs for the production of 900 bags were $7215 for materials (1850 metres purchased and used @ $3.90 per metre) and $10 125 for labour (1125 hours @ $9.00 per hour).
-Carlton's direct materials usage variance is:
A) $585 U
B) $600 U
C) $195 F
D) $200 U

Question

Quizplus · Accepted Answer

Direct materials usage variance measures the difference between the actual quantity of materials used and the standard quantity of materials that should have been used for the actual production. 
Direct materials usage variance = (Actual quantity of materials used - Standard quantity of materials that should have been used) x Standard price per unit

In this case, the actual quantity of materials used was 6,000 pounds, which is 200 pounds more than the standard quantity of 5,800 pounds. 
So, the direct materials usage variance = (6,000 - 5,800) x $1 
= $200 U

Therefore, the correct answer is option D.

Carlton Corporation Carlton Corporation Produces and Sells Faux-Leather Handbags. in the Current