standard cost are used in the calculation of
The entry is: Direct Materials Inventory is debited for the standard cost of $9,000 (3,000 yards at $3 per yard), Accounts Payable is credited for the actual amount owed, and the difference of $240 is credited to Direct Materials Price Variance. credit to the variance account indicates that the actual cost is less than the standard cost. After this transaction is recorded, the Direct Materials Price Variance account shows an overall credit balance of $190.