Question

The actual cost of direct materials is $10.50 per pound. The standard cost per pound is $11.75. 42) During the current period 10,000 pounds were used in production and 11,500 pounds werepurchased. The standard quantity for actual units produced is 9,900 pounds. The direct materials efficiency variance is:A) $1,175 favorable
B) $16,800 unfavorable
C) $1,175 unfavorable
D) $1,050 favorable

Answer 1

Answer:

Direct materials efficiency variance =  1175 unfavorable

so correct option is C) $1,175 unfavorable

Explanation:

given data

actual cost = $10.50 per pound

standard cost per pound =  $11.75

current period  = 10,000 pounds

purchased = 11,500 pounds

actual units produced = 9,900 pounds

to find out

direct materials efficiency variance

solution

we get here Direct materials efficiency variance that is express as

Direct materials efficiency variance = Standard rate × ( Standard quantity - Actual quantity )     ..................1

put here value in equation 1 and  we get

Direct materials efficiency variance =  11.75 × ( 10000 - 9900 )

Direct materials efficiency variance = 11.75 × 100

Direct materials efficiency variance =  1175 unfavorable

so correct option is C) $1,175 unfavorable