What Is Direct Material Price Variance?

The direct material price difference refers to the difference caused by the actual price of the material and the standard price under the actual output.

Direct material price difference

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Reasons for direct material price differences:

Direct material price differences occur for a number of reasons, such as the market

Calculation of direct material price differences:

Direct material price difference = actual quantity × actual priceactual quantity × standard price

= (

Accounting entries for direct material price differences:

According to the above example, it is the price overrun difference:

Borrow: production cost-direct material 2500 × 0.55

Loan: Raw materials 2500 * 0.5

Standard cost difference-material price difference 125

Saving difference:

Borrow: production cost-direct material 900

Standard cost difference-material price difference 100

Loan: 1,000 raw materials

Overrun difference:

Borrow: production cost-direct material 900

Loan: Raw materials 800

Standard cost difference-material price difference 100