the answer is D please explain ine Stores Company manufactures decorative fittin
ID: 2567865 • Letter: T
Question
the answer is D
please explain
ine Stores Company manufactures decorative fittings for luxury yachts that ra bighly skilled labor, and special metallic materials. Emerald uses standard costs to require pare its flexible standards for one of their popular products were as follows: budget. I pre Direct materials: 1 pound per unit; $4 per pound Direct labor: 4 hours per unit; $15 per hour Emerald produced 5,000 units during the quarter. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $98,000. Calculate the direct materials efficiency variance. A) $2,000 U B) $2,000 F C) $8,000 F D) $8,000 UExplanation / Answer
Answer : D. $8000 Unfavourable.
Direct Materials Efficiency Variance = (Actual Quantity - Standard Quantity) × Standard Cost
= (7000 pounds - 5000 units * 1 pound) * $4
= 2000 pounds * $4
= $8000 Unfavourable.
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