US CMA Part 1 · Chapter 3 · Question 6 of 30
To produce 23,500 units, a factory used 48,500 pounds of material. The standard is 2 pounds per unit at $3.00 per pound. What is the direct materials efficiency (usage) variance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $4,500 unfavorable
Explanation
Standard quantity allowed = 23,500 x 2 = 47,000 pounds. Efficiency variance = (actual quantity - standard quantity) x standard price = (48,500 - 47,000) x $3.00 = $4,500 unfavorable.
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