Meow Products Ltd.
Meow Products Ltd. in the US produces and sells scratching posts for cats. In the current year, the company had expected to sell 12 000 posts but actually produced and sold 10 000 posts. The following information is available regarding the standard cost to produce a single post:
$\begin{array}{ll}
\text { Direct materials: } & 3 \text { feet } @ 1.75 \text { per foot } \
\text { Direct labour: } & 15 \text { minutes } @ \$ .30 \text { per minute }
\end{array}$
In the current year, 38 000 feet of material were purchased out of which 35 000 feet were used at a cost of $1.55 per foot, and 160 000 direct labour minutes were incurred at a cost of $.32 per minute.
-The company's direct materials usage variance for the current year was:
A) $14 000 F
B) $ 1750 F
C) $ 3500 U
D) $ 8750 U

Question

Quizplus · Accepted Answer

The direct materials usage variance is calculated as the difference between the actual quantity of materials used and the standard quantity of materials that should have been used, multiplied by the standard price per unit. In this case, the actual quantity of materials used is 35,000 feet, the standard quantity of materials that should have been used is 36,000 feet (10,000 posts x 3 feet per post), and the standard price per unit is $1.75 per foot. Therefore, the direct materials usage variance is (35,000 feet - 36,000 feet) x $1.75 per foot = $8,750 unfavorable.

Meow Products Ltd In the Current Year, 38 000 Feet of Material Were