The formula AQ × (SP − AP)is the:
A)direct materials spending variance.
B)direct materials volume variance.
C)direct materials price variance.
D)direct materials quantity variance.

Question

Quizplus · Accepted Answer

The formula AQ × (SP − AP) is used to calculate the direct materials price variance, which measures the difference between the actual price paid for materials and the expected or budgeted price. AQ refers to the actual quantity of materials purchased or used, SP refers to the standard price or budgeted cost per unit of materials, and AP refers to the actual price paid per unit of materials. Therefore, the correct answer is option C.

The Formula AQ × (SP − AP)is The