Devon Company has collected the following data for one of its products: $\begin{array}{|l|r|}
\hline\text { Direct materials standard (4 pounds @ } \$ 1 / 1 b \text {.) } & \$ 4 \text { per unit } \
\hline \text { Direct materials flexible budget variance - unfavorable } & \$ 15,000 \
\hline \text { Actual direct materials used } & 103,000 \text { pounds } \
\hline \text { Actual units produced } & 22,000 \text { units }\\hline
\end{array}$ What is the direct materials efficiency variance?
A) $22,000 U
B) $15,000 F
C) $15,000 U
D) $22,000 F

Question

Quizplus · Accepted Answer

The direct materials efficiency variance is calculated as the difference between the actual quantity of materials used and the standard quantity of materials allowed for the actual output, multiplied by the standard price per unit. In this case, the actual quantity of materials used is 103,000 pounds, the standard quantity of materials allowed for the actual output is 88,000 pounds (22,000 units x 4 pounds per unit), and the standard price per unit is $1 per pound. Therefore, the direct materials efficiency variance is (103,000 pounds - 88,000 pounds) x $1 per pound = $15,000 unfavorable.

Devon Company Has Collected the Following Data for One of Its