If the standard to produce a given amount of product is 1,000 units of direct materials at $11 and the actual is 800 units at $12, the direct materials price variance is $800 unfavorable.

Price Variance

The difference between the actual cost of a good or service and its expected or standard cost, which can signal efficiency issues or market fluctuations.

Direct Materials

Raw materials that can be directly traced to the manufacturing process of a product and are a significant component of its production cost.

Unfavorable

A term often used in budgeting and financial analysis to describe results that are worse than expected or budgeted figures.