ECONOMICS

Detailed explanation-1: -Any variance between the standard and the actual is caused by a difference in quantity or a difference in price. Therefore, the total variance for direct material is broken down into the direct materials quantity variance and the direct materials price variance.

Detailed explanation-2: -What is the Direct Material Variance? The direct material variance is the difference between the standard cost of materials resulting from production activities and the actual costs incurred.

Detailed explanation-3: -Direct materials quantity variance is a part of the overall materials cost variance that occurs due to the difference between the actual quantity of direct materials used and the standard quantity allowed for the output. Direct materials quantity variance is also known as direct material usage or volume variance.

Detailed explanation-4: -Direct material price variance measures the cost of the difference between the expected price of materials required for the operations and the actual price of materials required for the operations.