If the actual price of direct materials is $200 and the standard price of the direct materials is $180,
A)there will be no direct materials quantity variance.
B)the direct materials quantity variance will be unfavorable.
C)the direct materials price variance will be favorable.
D)the direct materials price variance will be unfavorable.

Question

Quizplus · Accepted Answer

To calculate the direct materials price variance, we need to subtract the actual quantity of direct materials purchased from the actual price paid for those materials, and multiply the result by the standard price of the direct materials.

Direct Materials Price Variance = (Actual Quantity of Direct Materials Purchased x Actual Price of Direct Materials) - (Actual Quantity of Direct Materials Purchased x Standard Price of Direct Materials)

= (200 x $200) - (200 x $180)

= $40,000 - $36,000

= $4,000 (Unfavorable)

Since the direct materials price variance is unfavorable, the answer is D. There is not enough information given to determine the direct materials quantity variance.

If the Actual Price of Direct Materials Is $200 and the Standard