This, by itself, would not be likely to explain an unfavorable material efficiency (quantity) variance. There is nothing about the production level that should unfavorably impact the amount of direct materials used for each unit produced. However, inferior materials, less-skilled workers and workers learning to use new production equipment could explain an unfavorable materials quantity variance.
Inferior materials in the production process could explain a significant unfavorable material efficiency (quantity) variance, because an increased amount of the materials would be defective and thus unusable.
New production equipment can explain an unfavorable material efficiency (quantity) variance, because workers working on new equipment experience a learning curve. They could make mistakes that could cause their work, including the direct materials used, to have to be discarded; and more of this could occur than normal.
Less-skilled workers can explain an unfavorable material efficiency (quantity) variance, because less-skilled workers make more mistakes and can cause more of the work to have to be discarded, including the direct materials that have gone into the discarded work.
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