The materials efficiency variance is the difference between the actual material usage and the standard material usage for the actual level of output, multiplied by the standard price. There is no connection between the sales volume of the product and the materials efficiency variance.
The materials efficiency variance could be caused by a number of reasons, one of which is poor worker performance. If workers assembling the products are not performing their work properly, raw materials could be wasted or ruined.
The materials efficiency variance could be caused by a number of reasons, one of which is poor design of the product. Poor design could make it impossible for the standards to be met if, for instance, two parts did not fit together the way they were supposed to, and in working with them to make them fit, some were broken and became unusable. That would cause excess usage of the materials and unplanned costs.
The materials efficiency variance could be caused by a number of reasons, one of which is poor quality of the materials, which would be caused by actions of the purchasing department. For example, the purchasing department might purchase inferior materials in an effort to save money. Instead of saving money, the result might be that too many items purchased would be defective and unusable. This could result in additional costs to make them usable. Or, if the defective items could not be made usable, they would have to be thrown away, causing excess materials usage.
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