A company had a $56,000 unfavorable direct material efficiency variance during a time period when the standard rate per pound of direct material was $7 and the actual rate per pound of direct material was $7.50. If the standard quantity of direct material allowed for production was 52,000 pounds, how many pounds of direct material were actually used during this period?

Question

Quizplus · Accepted Answer

The direct material efficiency variance is calculated as (Actual Quantity - Standard Quantity) x Standard Rate. Given the variance is $56,000 unfavorable, the equation is (Actual Quantity - 52,000) x $7 = $56,000. Solving for Actual Quantity gives 60,000 pounds.

A Company Had a $56,000 Unfavorable Direct Material Efficiency Variance