Question

Oyster Bay Surfboards manufactures fiberglass surfboards. The standard cost of direct materials and direct manufacturing labor is $214 per board. This includes 35 pounds of direct​ materials, at the budgeted price of $2 per​ pound, and 10 hours of direct manufacturing​ labor, at the budgeted rate of $14.40 per hour. Following are additional data for the month of​ July: Units completed 5,500 units

Direct material purchases 230,000 pounds

Cost of direct material purchases $782,000

Actual direct manufacturing labor-hours 48,000 hours

Actual direct labor cost $705,600

Direct materials efficiency variance $1,100 F

There were no beginning inventories.

Price variance $14,400 U

Efficiency variance $100,800 F

Flexible-budget variance $86,400 F

Requirement 2. Compute the actual pounds of direct materials used in production in July. Begin by computing the number of pounds represented by the direct materials efficiency variance. Determine the​ formula, then complete the computation.

/

=

Variance (pounds)

Answer 1

Answer: Actual pounds of direct materials used in production : 191,950 pounds.

Direct Materials Efficiency Variance = 1,100 F

Direct materials efficiency variance = ( Standard quantity allowed for actual output - Actual quantity used ) Standard price per unit = ( 5,500 x 35 - X ) pounds * $ 2.00 per pound = 1,100

192,500 - X = 550

or X = 191,950 pounds