Bradford Company budgeted 4,000 pounds of material costing $5.00 per pound to produce 2,000 units. The company actually used 4,500 pounds that cost $5.10 per pound to produce 2,000 units. What is the direct materials price variance?

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as follows:

Actual Quantity Purchased x (Actual Price - Budgeted Price)

= 4,500 x ($5.10 - $5.00)
= $450 unfavorable

Bradford Company Budgeted 4,000 Pounds of Material Costing $5