Roberts Company uses a standard costing system.The following information pertains to direct materials for the month of July: $\begin{array}{lr}
\text { Standard price per kg } & \$ 18.00 \
\text { Actual purchase price per kg } & \$ 16.50 \
\text { Quantity purchased } & 3,100 \mathrm{~kg} \
\text { Quantity used } & 2,950 \mathrm{~kg} \
\text { Standard quantity allowed for actual output } & 3,000 \mathrm{~kg} \
\text { Actual output } & 1,000 \text { units }
\end{array}$ Roberts Company reports its material price variances at the time of purchase.
What is the material usage variance for Roberts Company?
A)$900 (F)
B)$900 (U)
C)$1,950 (F)
D)$2,850 (F)

Question

Quizplus · Accepted Answer

Material usage variance is calculated as (Actual Quantity Used - Standard Quantity Allowed) x Standard Price. Here, it is (2,950kg - 3,000kg) x $18/kg = -50kg x $18/kg = -$900, indicating a $900 favorable (F) variance because less material was used than the standard allowed.

Roberts Company Uses a Standard Costing System Roberts Company Reports Its Material Price Variances at the Time