Bottled premium tea leaves-grade AStandard variable product cost

Unit ($)

Direct material

(6 kilograms at $4 per kg)24

Direct labour

(1 hour at $7 per hour)7

Variable production overhead (1 direct labour hour) 3_

34

Additional information

-Variable production overhead varies with direct labour hours of input

-Budgeted fixed production overhead per month is $100,000

-Budgeted production is 20,000 bottles per month

Actual production and costs for one of the months were as follows:

Bottles produced18,500 bottles

($)

Direct materials purchased and used, 113,500 kg442,650

Direct labour, 17,800 hours129,940

Variable production overhead incurred58,800

Fixed production overhead incurred104,000

735,390

Question:

Calculate theMaterial usage variance