BTG Limited Uses a Standard Costing System for All Its

Multiple Choice

BTG Limited uses a standard costing system for all its products. BTG Limited produces Product D. The standard material usage for Product D is 5 kilograms of material at a cost of £10 per kilogram. Budgeted production for Product D is 10,000 units per annum. During the financial year ended 31 March 2020, BTG produced 11,000 product Ds using a total of 57,500 kilograms of material at a cost of £9.75 per kilogram. Based on the above information, what is the direct material usage variance for the year ended 31 March 2020?

A) £10,625 Unfavourable
B) £13,750 Favourable
C) £14,375 Favourable
D) £25,000 Unfavourable