Answer (B) is correct . The direct materials price variance equals the actual quantity used in production times the standard price minus the actual price. The variance is $760,000 unfavorable [190,000 × ($24 – $28)]. The variance is unfavorable because the actual price exceeded the standard price.
Answer (A) is incorrect because The variance is unfavorable. Answer (C) is incorrect because The direct materials efficiency variance is $240,000. Answer (D) is incorrect because The direct labor rate variance is $156,000.
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