During June, Cisco Company produced 12,000 chainsaw blades.The standard quantity of material allowed per unit was 1.5 pounds of steel per blade at a standard cost of $8 per pound.The actual cost was $7 per pound.The actual pounds of steel that Cisco purchased were 19,500 pounds.All materials purchased were used.Calculate Cisco's materials usage variance.
A) $10,500 U
B) $12,000 F
C) $12,000 U
D) $10,500 F

Question

Quizplus · Accepted Answer

12,000 blades × 1.5 pounds = 18,000 pounds of steel
MUV
= (AQ - SQ) × SP
= (19,500 - 18,000) × $8
= $12,000 U

During June, Cisco Company Produced 12,000 Chainsaw Blades