Chapter 21, Problem 9QS

To determine

Direct Materials Price Variance

Direct material price variance is said to occur when the actual costs of direct material incurred for production is different from that of the projected budget of direct materials price. Through the direct materials price variance the production process may be become more effective and efficient by taking corrective measures against unfavorable price variances. Also this variance analysis helps in preparation of various financial reports which depicts the true picture of the operations of the business.

The quantity of material used in the current accounting period.