B is corrent. This alternative correctly calculates the direct material efficiency (usage) variance as the difference between the standard pounds allowed for the actual units produced (32,000 × 1.60 = 51,200) and the actual pounds used (51,000) times the standard price ($2.50).
A is incorrect. This alternative incorrectly calculates the efficiency (usage) variance as the difference between the standard pounds allowed for the actual units produced (32,000 × 1.60 = 51,200) and the pounds of direct material purchased (50,000) times the standard price ($2.50).
C is incorrect. This alternative incorrectly calculates the efficiency (usage) variance as the difference between the standard pounds allowed for the budgeted units to be produced (30,000 × 1.60 = 48,000) and the pounds of direct material used (51,00) times the standard price ($2.50).
D is incorrect. This alternative incorrectly calculates the efficiency (usage) variance as the difference between the budgeted finished units to be produced (30,000) and the actual finished units produced (32,000) times the standard direct material cost of the finished units ($4.00).
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