Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound.What is the direct materials price variance?
A) $3,000 favorable
B) $3,000 unfavorable
C) $2,880 favorable
D) $2,880 unfavorable

Question

Myers Corporation has the following data related to direct materials costs for November: actual costs for 5,000 pounds of material, $4.50; and standard costs for 4,800 pounds of material at $5.10 per pound.​What is the direct materials price variance?
A) $3,000 favorable
B) $3,000 unfavorable
C) $2,880 favorable
D) $2,880 unfavorable

Quizplus · Accepted Answer

The direct materials price variance is calculated as (Actual Price - Standard Price) x Actual Quantity. Here, it is ($4.50 - $5.10) x 5,000 = -$0.60 x 5,000 = -$3,000, which is a favorable variance because the actual cost is less than the standard cost.

Myers Corporation Has the Following Data Related to Direct Materials