If actual direct materials costs are greater than standard direct materials costs, it means that

Question

Business

Erik Mitchell

6 December, 11:09

If actual direct materials costs are greater than standard direct materials costs, it means that

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Answers (2)

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Beatrice Pierce · Answer 1

the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.

Explanation:

Standard costs are commonly associated with a manufacturing company's costs of direct material, direct labor, and manufacturing overhead. Instead of assigning the actual cost of direct labor, direct material and manufacturing overhead to a product a number of manufactures assign the standard cost

Oswaldo Pratt · Answer 2

C. the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.

Explanation:

If the actual direct material cost used is greater than the standard direct material cost, it implies that the cost of material that was actually used in carrying the project is greater than the usual standards for such project or the budgeted standards for such project. When the actual cost is greater than the standard cost, we have an unfavorable variance. When the actual cost is greater than standard cost, it usually implies that the price of unit per raw material used is greater or/and the actual quantities of raw material used is greater.