The Clarkson Company produces engine parts for car manufacturers. For 2015, The company expected to produce and sell 200 units for 1,000$ each the standard cost of direct materials allowed for each unit of engine part was $300 (5Kg at $60per Kg)
During 2015, actual number of units produced and sold was 185 for $1,100 each.
Actual cost of direct materials used was 6 Kg per unit purchased at $55 per kg.
Required
1-calculates sales volume and flexible budget variances for the sales revenues
2-calculate the sales volume and flexible budget variances for the direct material
3-caculate price and efficiency variances for the direct material 4-give two possible reasons for direct material efficiency variance