SeaKist Marine Stores Company manufactures decorative fittings for luxury yachts,which require highly skilled labor,and special metallic materials.SeaKist uses standard costs to prepare its flexible budget.For the first quarter of 2016,direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 1.5 pounds per unit; $4 per pound
Labor: 2 hours per unit; $18 per hour
During the first quarter,SeaKist produced 5,000 units of this product.At the end of the quarter,an examination of the direct materials records revealed that the company used 7,000 pounds of direct materials.The direct materials efficiency variance was $2,000 F.Which of the following is a logical explanation for this variance?

Question

Quizplus · Accepted Answer

The direct materials efficiency variance measures the difference between the actual quantity of materials used and the standard quantity allowed, multiplied by the standard price per unit. In this case, the company used 7,000 pounds of direct materials, which is 1,000 pounds more than the standard quantity allowed (5,000 units × 1.5 pounds per unit = 7,500 pounds). The variance is unfavorable (F) because the company used more materials than it was supposed to, which resulted in a higher cost of materials.

SeaKist Marine Stores Company Manufactures Decorative Fittings for Luxury Yachts,which