If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual direct materials used are 800 units at $12, the direct materials price variance is $800 unfavorable.

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as (Actual price - Standard price) x Actual quantity. In this case, the actual price is $12 and the standard price is $11, so the price variance is ($12 - $11) x 800 = $800 unfavorable.

If the Standard to Produce a Given Amount of Product