Question

Goldman, Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 1.0 pound per class at a cost of $.50 per pound. The actual results for one month's production of 7200 glasses was 1.1 pounds per glass, at a cost of $.40 per pound. Calculate the direct materials cost variance and the direct material efficiency variance.

Identify whether the varience is favorable (F) or unfavorable (U).

Answer 1

* Calculation : - Direct material Cost Variance Actual & Actual Standard © Quantity Cost Cost 7920 x C 0.40 - 0.50) $ 792. favorable Favorable variance actual cost pel unit less than Standard cost per unito 10 s Actual Quantity = 7200 glasses x lol pound= 7920 - is Direct material - Standard Xl Actual efficiency Variance Poice 0.50x (7920 - 7200) $360 unfavorable unfavorable variance as actual aty weed is more than Standard aty allowed. - Std Qty = 7200 glasses x 10 pound= 7200 25