An unfavorable material price variance indicates that:
A) The actual quantity of output produced required more raw material than allowed for under the standards.
B) The actual price paid for raw material exceeded that budgeted in the standards.
C) The company was unexpectedly efficient in its use of raw material.
D) The materials purchasing manager secured an unexpected quantity discount on the price of material purchased.

Question

Quizplus · Accepted Answer

An unfavorable material price variance occurs when the actual price paid for raw materials exceeds the budgeted or standard cost. This variance focuses solely on the price paid per unit of material, not the quantity used.

An Unfavorable Material Price Variance Indicates That