Gutierrez Company budgeted 10,000 pounds of direct materials costing $21.50 per pound to make 5,000 units of product.The company actually used 10,200 pounds of direct materials costing $24.00 per pound to make the 5,000 units.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. Here, (10,200 - 10,000) x $21.50 = $4,300 unfavorable.

Gutierrez Company Budgeted 10,000 Pounds of Direct Materials Costing $21