Question: Answer the correct material usage variance from the information given below: The standard material cost for manufacturing 1000 units of an output is 400 kgs

Answer the correct material usage variance from the information given below:

The standard material cost for manufacturing 1000 units of an output is 400 kgs of material at Rs. 2.50 per kg. When 2000 units are produced, it is found that actual consumption was 825 kgs material at a price of Rs. 2.70 per kg.:

1) Rs. 67.50 Favourable
2) Rs. 67.50 Adverse
3)Rs. 62.50 Favourable
4) Rs. 62.50 Adverse

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