Which of the following choices correctly indicates the use of the standard price per unit of direct material when calculating the materials price variance and the material quantity variance?
Price Variance Quantity Variance
A) Used Always used
B) Used Occasionally used
C) Used Not used
D) Not used Always used
E) Not used Not used

Question

Quizplus · Accepted Answer

The standard price per unit of direct material is always used when calculating the materials price variance and the material quantity variance. The materials price variance is the difference between the actual price paid for direct materials and the standard price per unit of direct materials. The material quantity variance is the difference between the actual quantity of direct materials used and the standard quantity of direct materials allowed for the actual output.

Which of the Following Choices Correctly Indicates the Use of the Standard