Meow Products Ltd. Meow Products Ltd. produces and sells scratching posts for cats. In the current year, the company had expected to sell 12,000 posts but actually produced and sold 10,000 posts. The following information is available regarding the standard cost to produce a single post:
In the current year, 38,000 feet of material were purchased out of which 35,000 feet were used at a cost of $1.55 per foot, and 160,000 direct labor minutes were incurred at a cost of $.32 per minute.
Refer to the Meow Products Ltd. information above. The company's direct materials usage variance for the current year is:
A) $14,000 F.
B) $ 1,750 F.
C) $ 3,500 U.
D) $ 8,750 U.

Question

Meow Products Ltd. Meow Products Ltd. produces and sells scratching posts for cats. In the current year, the company had expected to sell 12,000 posts but actually produced and sold 10,000 posts. The following information is available regarding the standard cost to produce a single post:
 In the current year, 38,000 feet of material were purchased out of which 35,000 feet were used at a cost of $1.55 per foot, and 160,000 direct labor minutes were incurred at a cost of $.32 per minute.
Refer to the Meow Products Ltd. information above. The company's direct materials usage variance for the current year is:
A) $14,000 F. 
B) $ 1,750 F. 
C) $ 3,500 U. 
D) $ 8,750 U.

Quizplus · Accepted Answer

Direct materials usage variance = (Standard quantity of material - Actual quantity of material used) x Standard price per unit

Standard quantity of material required to produce 1 scratching post = 3.5 feet
Standard quantity of material required to produce 10,000 posts = 35,000 feet

Actual quantity of material used = 38,000 feet

Direct materials usage variance = (3,500 - 3,800) x $1.50 = $8,750 U

Therefore, the correct choice is D, $8,750 U.