Answer:
Direct materials efficiency variance=-$500
Explanation:
Direct materials efficiency variance is the difference between the actual quantity of direct materials and the standard or budgeted quantity of direct materials multiplied by the standard cost of direct materials.
Step 1: Calculate the actual quantity of direct materials
Actual quantity=2,000 yards
Step 2: Calculate the budgeted quantity of direct materials
Budgeted quantity=rate per chair×actual number of chairs produced
Budgeted quantity=(5×410)=2,050 yards
Step 3: Calculate the standard rate of direct materials
Standard rate=$10 per yard
Step 4: Calculate the direct materials efficiency variance
Direct efficiency variance=(Actual labor-budgeted labor)×standard price
where;
Actual labor=2,000 yards
Budgeted labor=2,050 yard
Standard price=$10 per hour
replacing;
Direct labor efficiency variance=(2,000-2,050)×10
Direct labor efficiency variance=-$500
