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rrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the
rrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. |
Standard Quantity | Standard price | Standard cost | |
Direct Materials | 10 pounds | $2.00 per pound | $20.00 |
Direct Labor | 0.25 hour | $10.00 per hour | $2.50 |
During November, Arrow purchased 220,000 pounds of direct materials at a total cost of $446,000. The total factory wages for November were $54,500, 90% of which were for direct labor. Arrow manufactured 21,000 units of product during November using 193,500 pounds of direct materials and 5,350 direct labor hours. |
What is the direct materials efficiency (quantity) variance for November? |
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