The following information is for Euclid Corporation: $\begin{array}{lrl}
&\text { Direct }\
&\text { Material }\
\text { Standard price per unit of input } & \$ 25 & \
\text { Actual price per unit of input } & \$ 24 & \
\text { Standard inputs allowed per unit of output } & 3 & \text { pounds } \
\text { Actual units of input } & 8,300 & \text { pounds } \
\text { Actual units of output } & 2,770& \text { units }
\end{array}$ * Direct material is measured in pounds _____ is the direct-material usage variance.
A)$250 unfavorable
B)$250 favorable
C)$8,300 unfavorable
D)$8,300 favorable

Question

Quizplus · Accepted Answer

The direct-material usage variance is calculated as (Standard Inputs Allowed for Actual Output - Actual Inputs) x Standard Price. Here, it's (2,770 units x 3 pounds/unit - 8,300 pounds) x $25/pound = (8,310 - 8,300) x $25 = 10 x $25 = $250 favorable, because less material was used than the standard allowed for the actual output.

The Following Information Is for Euclid Corporation * Direct Material Is Measured in Pounds _____ Is the }\\&\text

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