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    Material quantity and price variance

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    Based upon the following/attached information please explain why the related answer to the direct material variances are favorable and unfavorable. The formula and math related to direct material is easy, but I do not understand why the answer is favorable versus unfavorable. Please explain in detail.

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    Solution Preview

    Favorable or unfavorable is in relation to actual and standard.
    For price variance, the actual price is 171,000/22,500 = RM 7.6 per kg
    The standard cost is given as RM8 is per ...

    Solution Summary

    The posting has solution to question Exercise 11-2 Direct Materials Variance relating to use of plastic in football helmets made by Bandar Industries Behad of Malaysia.