Answer:
Direct material quantity (efficiency) variance= $60,500 unfavorable
Explanation:
Giving the following information:
Standards:
Direct materials: 1 pound per unit; $ 11 per pound
Allen produced 2,000 units during the quarter.
Direct material used= 7,500 pounds
To calculate the direct material efficiency variance, we need to use the following formula:
Direct material quantity (efficiency) variance= (standard quantity - actual quantity)*standard price
standard quantity= 2,000*1= 2,000 pounds
Direct material quantity (efficiency) variance= (2,000 - 7,500)*11
Direct material quantity (efficiency) variance= $60,500 unfavorable
It is unfavorable because the company used more materials that estimated to produce 2,000 units.
