Question

Martin, Inc is a manulachurer of lead crystal glasses. The standard direct materials quartity is 1.0 pound per glass at a cost of $0.50 per pound The actual resut for one month's production of 6,500 glasses was 12 pounds per glass, at a cost of S0.30 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance Select the formula, then enter the amounts and compute the cost variance for direct materials and identify whether the variance is favorable (F) or unfavorable (U) ) x Direct Materials Cost Variance )x Select the formula, then enter the amounts and compute the efficiency variance for direct materials and identify whether the variance is favorable (F) or unfavorable (U). Direct Materials Efficiency Variance

Answer 1

Direct material cost variance = Standard cost - Actual cost

= 6500*1*0.50 - 6500*1.2*0.30 = $910 Favorable

Direct labor efficiency variance = (standard quantity - actual quantity)*standard price

= (6500*1-6500*1.20)*0.50

= $650 Unfavorable