Royal Company uses a standard costing system.The following information pertains to direct materials for the month of September: $$\begin{array} { l r }
\text { Standard price per kilogram } & \$ 17.00 \
\text { Actual purchase price per kilogram } & \$ 16.50 \
\text { Quantity purchased } & 3,100 \mathrm {~kg} \
\text { Quantity used } & 3,950 \mathrm {~kg} \
\text { Standard quantity allowed for actual output } & 4,000 \mathrm {~kg} \
\text { Actual output } & 1,000 \text { units }
\end{array}$$ Royal Company reports its material price variances at the time of purchase.What is the material usage variance for Royal Company?
A) $850 (U)
B) $850 (F)
C) $1,950 (F)
D) $2,850 (F)

Question

Royal Company uses a standard costing system.The following information pertains to direct materials for the month of September: $$\begin{array} { l r } 
\text { Standard price per kilogram } & \$ 17.00 \
\text { Actual purchase price per kilogram } & \$ 16.50 \
\text { Quantity purchased } & 3,100 \mathrm {~kg} \
\text { Quantity used } & 3,950 \mathrm {~kg} \
\text { Standard quantity allowed for actual output } & 4,000 \mathrm {~kg} \
\text { Actual output } & 1,000 \text { units }
\end{array}$$ Royal Company reports its material price variances at the time of purchase.What is the material usage variance for Royal Company?
A) $850 (U)
B) $850 (F)
C) $1,950 (F)
D) $2,850 (F)

Quizplus · Accepted Answer

The Answer of Royal Company uses a standard costing system.The following information pertains to direct materials for the month of September: $$\begin{array} { l r } 
\text { Standard price per kilogram } & \$ 17.00 \
\text { Actual purchase price per kilogram } & \$ 16.50 \
\text { Quantity purchased } & 3,100 \mathrm {~kg} \
\text { Quantity used } & 3,950 \mathrm {~kg} \
\text { Standard quantity allowed for actual output } & 4,000 \mathrm {~kg} \
\text { Actual output } & 1,000 \text { units }
\end{array}$$ Royal Company reports its material price variances at the time of purchase.What is the material usage variance for Royal Company?
A) $850 (U)
B) $850 (F)
C) $1,950 (F)
D) $2,850 (F)

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