Devon Company has collected the following data for one of its products: $\begin{array}{|l|l|}
\hline\text { Direct materials standard (3 pounds @ } \$ 1 / \mathrm{lb} \text {.) } & \$ 3 \text { per unit } \
\hline \text { Direct materials flexible budget variance - unfavorable } & \$ 15,500 \
\hline \text { Actual direct materials used } & 101,000 \text { pounds } \
\hline \text { Actual units produced } & 18,000 \text { units } \
\hline
\end{array}$ What is the direct materials efficiency variance?

Question

Quizplus · Accepted Answer

The direct materials efficiency variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. The standard quantity for 18,000 units is 54,000 pounds (18,000 units x 3 pounds/unit). The variance is (101,000 - 54,000) x $1 = $47,000 unfavorable.

Devon Company Has Collected the Following Data for One of Its