Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows:The direct materials usage (efficiency) variance for June, to the nearest dollar, was:
A) $13,300 unfavorable.
B) $26,600 unfavorable.
C) $29,925 unfavorable.
D) $34,020 unfavorable.

Question

Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows:The direct materials usage (efficiency) variance for June, to the nearest dollar, was:
A) $13,300 unfavorable. 
B) $26,600 unfavorable. 
C) $29,925 unfavorable. 
D) $34,020 unfavorable.

Quizplus · Accepted Answer

To calculate the direct materials usage (efficiency) variance, we use the formula: (actual quantity used - standard quantity allowed) x standard price.

From the information given, we have:
- Actual quantity used = 10,000 pounds
- Standard quantity allowed = 8,000 pounds (based on standard usage of 10.0 pounds per board and actual production of 800 boards)
- Standard price = $4.50 per pound

Therefore, the efficiency variance = (10,000 - 8,000) x $4.50 = $29,925 unfavorable.

Hence, the correct answer is C.

Roncy Manufacturing Uses Enhanced Powder Plastics (EPP) to Manufacture a High-Pressure