The following data relate to direct materials costs of Texas Inc. for November: $\begin{array}{lrr}
\text { 4,500 pounds at $ \$ 6.00 $ } & \text { Actual costs }\
\text { 4,600 pounds at $ \$ 5.50 $ } & \text {Standard costs }\
\end{array}$
Refer to the information provided for Texas Inc. What is the direct materials price variance?
A) $2,250 unfavorable
B) $2,250 favorable
C) $2,300 unfavorable
D) $1,700 unfavorable

Question

The following data relate to direct materials costs of Texas Inc. for November: $\begin{array}{lrr}
  \text { 4,500 pounds at $ \$ 6.00 $ } &  \text { Actual costs }\
 \text { 4,600 pounds at $ \$ 5.50 $ } &  \text {Standard costs  }\
\end{array}$
 Refer to the information provided for Texas Inc. What is the direct materials price variance?
A) $2,250 unfavorable
B) $2,250 favorable
C) $2,300 unfavorable
D) $1,700 unfavorable

Quizplus · Accepted Answer

The direct materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it is ($6.00 - $5.50) x 4,500 = $2,250 unfavorable.

The Following Data Relate to Direct Materials Costs of Texas