Devon Company has collected the following data for one of its products:



What is the direct materials efficiency variance?

A) $18,000 U

B) $47,000 F

C) $47,000 U

D) $18,000 F


C) $47,000 U
Explanation: Direct materials efficiency variance = (Actual quantity - Standard quantity) × Standard cost
Direct materials efficiency variance = [101,000 pounds - (3 pounds × 18,000 units)] × $1 per pound = (101,000 pounds - 54,000 pounds) × $1 per pound
Direct materials efficiency variance = $47,000 Unfavorable

Business

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