Melissa Antiques Company has collected the following data for one of its products
Direct materials standard (3 pounds @ 1/lb.) $3 per unit
Direct materials flexible budget variance-unfavorable $15,500
Actual direct materials used 101,000 pounds
Actual units produced 18,000 units
What is the direct materials efficiency variance?
A) $18,000 U
B) $47,000 F
C) $47,000 U
D) $18,000 F
C .C) Direct materials efficiency variance = (Actual quantity - Standard quantity) x Standard cost
Direct materials efficiency variance = [101,000 pounds - (3 pounds x 18,000 units)] x $1 per pound = (101,000 pounds - 54,000 pounds) x $1 per pound
Direct materials efficiency variance = $47,000 Unfavorable
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What will be an ideal response?
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What will be an ideal response?