Pericloud Company uses a standard costing system.The following information pertains to direct materials for July:
Pericloud Company reports its material price variances at the time of purchase.What is the material usage variance for Pericloud Company?
A) $1,900 U
B) $2,450 F
C) $7,850 U
D) $1,000 F

Question

Pericloud Company uses a standard costing system.The following information pertains to direct materials for July:
 Pericloud Company reports its material price variances at the time of purchase.What is the material usage variance for Pericloud Company?
A) $1,900 U 
B) $2,450 F 
C) $7,850 U 
D) $1,000 F

Quizplus · Accepted Answer

Materials usage variance = (Actual quantity - Standard quantity) × Standard price
Materials usage variance = (1,400 - 1,450) × $20 = $1,000 F

Pericloud Company Uses a Standard Costing System