Question

Jackson comma Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 0.9 pound per glass at a cost of $ 0.60 per pound. The actual result for one​ month's production of 7 comma 100 glasses was 1.2 pounds per​ glass, at a cost of $ 0.40 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.

Answer 1

$426 Favorable

$1,278 Unfavourable

Step-by-step explanation:

Direct material cost variance = Standard cost - Actual cost

= 65

7,100*0.9*0.60 - 7,100*1.2*0.40

=3,834-3,408

= $426 Favorable

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

= (7,100*0.9- 7,100*1.2)*0.60

=6,390-8,520*0.60

=-2,130*0.60

=$-1,278 Unfavourable