Use the information below to answer the following question(s).Robb Industries Inc.(RII), developed standard costs for direct material and direct labour.In 2019, RII estimated the following standard costs for one of their major products, the 10-litre plastic container. During June 2020, RII produced and sold 5,000 containers using 490 kilograms of direct materials at an average actual cost per kilogram of $32 and 250 direct manufacturing labour-hours at an average actual wage of $15.25 per hour.
-June's direct material efficiency variance is
A)$320 unfavourable.
B)$300 favourable.
C)$680 favourable.
D)$300 unfavourable.
E)$320 favourable.

Question

Use the information below to answer the following question(s).Robb Industries Inc.(RII), developed standard costs for direct material and direct labour.In 2019, RII estimated the following standard costs for one of their major products, the 10-litre plastic container.  During June 2020, RII produced and sold 5,000 containers using 490 kilograms of direct materials at an average actual cost per kilogram of $32 and 250 direct manufacturing labour-hours at an average actual wage of $15.25 per hour.
-June's direct material efficiency variance is
A)$320 unfavourable. 
B)$300 favourable. 
C)$680 favourable. 
D)$300 unfavourable. 
E)$320 favourable.

Quizplus · Accepted Answer

The direct material efficiency variance is calculated as (Actual Quantity - Standard Quantity) x Standard Price. If the variance is favourable, it means less material was used than expected.

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