Marine Stores Company manufactures decorative fittings for luxury yachts that require highly skilled labor, and special metallic
Question:
Marine Stores Company manufactures decorative fittings for luxury yachts that require highly skilled labor, and special metallic materials. Marine uses standard costs to prepare its flexible budget. For the first quarter of 2015, direct material and direct labor standards for one of their popular products were as follows:
Direct materials: 1 pound per unit; $4 per pound
Direct labor: 4 hours per unit; $15 per hour
Marine produced 5,000 units during the quarter. At the end of the quarter, an examination of the materials records showed that the company used 7,000 pounds of materials and actual total material costs were $98,000.
Calculate the direct materials efficiency variance.
Managerial Accounting Tools for business decision making
ISBN: 978-1118096895
6th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso