Chapter 25, Problem 14Q

To determine

Unfavorable Materials Price Variance: The unfavorable material price variance refers to that difference which arises when the direct material is purchased for more amount than the estimated price per unit. This means that the direct material variance has a negative value as the amount paid is more than the standard price.

Unfavorable Materials Quantity Variance: The unfavorable materials quantity variance refers to that difference which arises when the quantity of the direct materials used is greater than the standard quantity which was estimated.

To explain: The circumstances that cause the purchasing department to be responsible for both an unfavorable price variance and an unfavorable materials quantity variance.