If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials price variance is $800 favorable.

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as (actual price - standard price) x actual quantity purchased. Using the given information, the calculation would be ($12 - $11) x 800 = $800 unfavorable, not favorable as stated in the statement.

If the Standard to Produce a Given Amount of Product