Refer to the information provided for Efficient Corporation.The direct materials cost variance is:
A)$1,125 favorable.
B)$4,750 unfavorable.
C)$6,000 unfavorable.
D)$7,125 unfavorable.

Question

Quizplus · Accepted Answer

Direct materials cost variance = (Actual quantity x Actual price) - (Actual quantity x Standard price) 
= (6,000 x $1.25) - (5,000 x $1) 
= $7,500 - $5,000 
= $2,500 unfavorable

However, it is given that there was an unfavorable price variance of $2,250. Therefore, the direct materials cost variance = unfavorable quantity variance + unfavorable price variance = $2,500 + $2,250 = $4,750 unfavorable.

Refer to the Information Provided for Efficient Corporation