Brown Company produces fine leather footballs. The standard cost for each footba

Question

Brown Company produces fine leather footballs. The standard cost for each football is:
Direct material 2 feet of leather at $4.00/foot $8.00
Direct labor 1.5 hours at $12.00/hour $18.00

During February, 1,200 footballs were produced. 2,600 feet of leather were purchased at $4.25 per foot. Of this, 2,300 feet were used in production. Direct labor cost incurred was $20,930 for 1,820 hours.
Reference: Ref 11-2

What is the direct material usage variance?
Answer


$100 unfavorable

$400 favorable

$800 favorable

$800 unfavorable

Explanation / Answer

Material usage variance = (Actual quantity x Standard rate) - (Standard qunatity x standard rate) = (2300 x 4) - (2,400 x 4) = 9,200 - 9,600 = 400 (favorable) Answer $400 favorable

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