Kidzlane has direct materials (DL) standards of 2 pounds per unit at $4 per pound for its most popular toy. Last month, 5,600 pounds of direct materials that actually cost $28,000 were used to produce 3,000 toy units. The direct materials (DM) efficiency variance for last month was
A) $1,600 unfavorable.
B) $1,600 favorable.
C) $5,600 unfavorable.
D) $5,600 favorable.

Question

Quizplus · Accepted Answer

DM Efficiency Variance = (AQ x SP) - (SQ x SP) = (5,600 x $4) - [(3,000 x 2) x $4] = $1,600 Favorable

Kidzlane Has Direct Materials (DL) Standards of 2 Pounds Per