Figure 2
Rax Company has developed the following standards for one of its products:
The following activities occurred during the month of October:
The company records materials price variances at the time of purchase.

-Refer to Figure 2. Rax's materials usage variance would be
A) £8,400 unfavorable
B) £8,400 favorable
C) £5,600 unfavorable
D) £5,600 favorable

Question

Figure 2
Rax Company has developed the following standards for one of its products:
The following activities occurred during the month of October:
  The company records materials price variances at the time of purchase.
 
-Refer to Figure 2. Rax's materials usage variance would be
A) £8,400 unfavorable 
B) £8,400 favorable 
C) £5,600 unfavorable 
D) £5,600 favorable

Quizplus · Accepted Answer

The materials usage variance is calculated as the difference between the standard quantity of materials that should have been used for the actual production and the actual quantity of materials used, multiplied by the standard cost per unit of material. A favorable variance occurs when the actual usage is less than the standard usage, indicating efficiency.

Figure 2 Rax Company Has Developed the Following Standards for One of One