If the ending inventory of material is greater than beginning inventory, then the direct?material price variance is based on the _____.
A)standard quantity allowed for actual production
B)quantity used
C)quantity purchased
D)goods actually produced

Question

Quizplus · Accepted Answer

Direct material price variance is calculated based on the difference between the actual price paid for the materials and the standard price that was expected to be paid. The calculation is based on the quantity used, not on the quantity purchased or the goods produced. Therefore, the answer is B – quantity used.

If the Ending Inventory of Material Is Greater Than Beginning