MSC Limited Uses a Standard Costing System for All Its

Multiple Choice

MSC Limited uses a standard costing system for all its products. MSC Limited produces hoodies. Each hoodie uses a standard 5 metres of material at a standard cost of £3 per metre. Budgeted production is 2,000 hoodies per annum. During the financial year ended 30 April 2019, MSC produced 2,200 hoodies. The cost of each metre of material was £3.25 and 4.8 metres of material were used in each hoodie produced. Based on the above information, what is the direct material price variance for the year ended 30 April 2019?

A) £1,320 Favourable
B) £1,320 Unfavourable
C) £2,400 Unfavourable
D) £2,640 Unfavourable