BFM Limited Uses a Standard Costing System for All Its

Multiple Choice

BFM Limited uses a standard costing system for all its products. BFM Limited produces Product C. The standard material usage for Product C is 3 kilograms of material at a cost of £5 per kilogram. Budgeted production for Product C is 4,000 units per annum. During the financial year ended 28 February 2020, BFM produced 4,500 Product Cs using a total of 12,600 kilograms of material at a cost of £5.50 per kilogram. Based on the above information, what is the direct material usage variance for the year ended 28 February 2020?

A) £1,800 Unfavourable
B) £4,000 Favourable
C) £4,500 Favourable
D) £6,300 Unfavourable