A company established its annual direct material budget to produce 300,000 units as follows.
150,000 pounds of material @ $0.75 per pound = $112,500
Throughout the year, the company produced 310,000 units of finished goods using 0.48 pounds per unit at a cost of $0.76 per pound. The direct material efficiency variance is
a. $588 unfavorable.
b. $900 favorable.
c. $1,488 unfavorable.
d. $4,650 favorable.
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Suraj Rana.
Dubai Chapter
UAE
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