The Following Data Relate to Direct Materials Costs for November

question 116

Multiple Choice

The following data relate to direct materials costs for November:

-What is the direct materials price variance?

• A)$2,250 unfavorable
• B)$2,250 favorable
• C)$2,300 unfavorable
• D)$1,700 unfavorable

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Definitions:

Price Variance

The difference between the actual price paid for a good or service and its expected price, often analyzed in budgeting and cost management.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected for the actual production level, multiplied by the standard labor rate.

Direct Materials

The raw materials that are directly traceable to a finished product and are an integral part of the finished product.

Standard Costs

Predetermined costs for material, labor, and overhead used as benchmarks against which to compare the actual production costs.