Emerald Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Emerald uses standard costs to prepare its flexible budget.For the first quarter of 2015,direct material and direct labor standards for one of their popular products were as follows: Materials: 1.5 pounds per unit; $4 per pound
Labor: 2 hours per unit; $18 per hour
During the first quarter,Emerald produced 5,000 units of this product.At the end of the quarter,an examination of the materials records showed that the company used 7,000 pounds of materials and the direct materials cost variance was $1,750 U.Which of the following would be a logical explanation for this variance?
A) The company used more labor hours than allowed by the standards.
B) The company paid a higher rate for labor than allowed by the standards.
C) The company used a greater quantity of materials than allowed by the standards.
D) The company paid a higher price for the materials than allowed by the standards.
Correct Answer:
Verified
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