Question

An unfavorable material price variance occurs because of ___________.

• A. price increase in raw materials
• B. price decrease in raw materials
• C. less than anticipated normal wastage in the manufacturing process
• D. more than anticipated normal wastage in the manufacturing process

Answer 1

The correct option is A price increase in raw materials

If the actual price paid for materials is more than the standard price, an unfavorable materials price variance occurs. On the other hand, if the actual price paid for the materials is less than the standard price, a favorable materials price variance occurs