If actual direct materials costs are greater than standard direct materials costs it means that
A) actual costs were calculated incorrectly.
B) the actual unit price of direct materials was greater than the standard unit price of direct materials.
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.
D) the purchasing agent or the production foreman is inefficient.

Question

Quizplus · Accepted Answer

Actual direct materials costs being greater than standard direct materials costs indicates that there was either an increase in the unit price of raw materials purchased or an increase in the quantity of raw materials used in production. This could be due to factors such as changes in market prices, supplier issues or inefficiencies in the production process. Option A, B and D are incorrect as they do not provide a proper explanation for the variance in direct materials costs.

If Actual Direct Materials Costs Are Greater Than Standard Direct