The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs
Direct materials (per completed unit) $ \quad 1.04 $ kilograms $ @ \$ 8.75 $

Actual Costs
Direct materials$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $2,500 kilograms $ @ \$ 8 $
? The amount of direct materials price variance is:
A) $1,875 unfavorable.
B) $1,950 favorable.
C) $1,875 favorable.
D) $1,950 unfavorable.

Question

The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows: Standard Costs
Direct materials (per completed unit) $ \quad 1.04 $ kilograms $ @ \$ 8.75 $

Actual Costs
Direct materials$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $2,500 kilograms $ @ \$ 8 $
 ? The amount of direct materials price variance is:
A) $1,875 unfavorable.
B) $1,950 favorable.
C) $1,875 favorable.
D) $1,950 unfavorable.

Quizplus · Accepted Answer

The direct materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it's ($8 - $8.75) x 2,500 = -$1,875, which is favorable because the actual price is less than the standard price.

The Standard Costs and Actual Costs for Direct Materials for the Manufacture