Calculate the Direct Materials Price variance using the above information:
A) $1,795.50 Favorable
B) $378.00 Favorable
C) $4,512.50 Unfavorable
D) $378.00 Unfavorable

Question

Calculate the Direct Materials Price variance using the above information:
A) $1,795.50 Favorable 
B) $378.00 Favorable 
C) $4,512.50 Unfavorable 
D) $378.00 Unfavorable

Quizplus · Accepted Answer

Direct materials price variance = (Actual price - Standard price) x Actual quantity purchased
= (($18 - $12) x 2,000)
= $12,000 unfavorable

Therefore, the correct answer is choice C, which is $4,512.50 unfavorable.

Calculate the Direct Materials Price Variance Using the Above Information