Myers Corporation has the following data related to direct materials costs for November: actual cost for 5,000 pounds of material at $4.50 per pound and standard cost for 4,800 pounds of material at $5.10 per pound. The direct materials price variance is
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 cost for 5,000 pounds of material at $4.50 per pound and standard cost for 4,800 pounds of material at $5.10 per pound.​ The direct materials price variance is
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 = -$3,000, which is favorable because the actual cost is less than the standard cost.

Myers Corporation Has the Following Data Related to Direct Materials