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What is the direct materials efficiency variance

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Q1. Allen Boating Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Allen uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:

Direct materials: 1 pound per unit; $12 per pound

Direct labor: 4 hours per unit; $19 per hour

Allen produced 1,000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 6,500 pounds of direct materials and actual total materials costs were $99,600.

What is the direct materials efficiency variance?

A. $12,000 F

B. $66,000 F

C. $66,000 U

D. $12,000 U

Q2. Home Decor Company manufactures special metallic materials for luxury homes that require highly skilled labor. Home Decor uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:

Direct materials: 3 pounds per unit; $3 per pound

Direct labor: 4 hours per unit; $16 per hour

Home Decor produced 4,000 units during the quarter. At the end of the quarter, an examination of the labor costs records showed that the company used 25,000 direct labor hours and actual total direct labor costs were $375,000. What is the direct labor cost variance? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.)

A. $256,000 Unfavorable

B. $25,000 Unfavorable

C. $25,000 Favorable

D. $256,000 Favorable

Reference no: EM132776523

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