For purposes of the calculation for the direct materials price variance,when the quantity of materials purchased and used are different,which quantity of materials is relevant?
A) Standard quantity allowed
B) Actual quantity purchased
C) Actual quantity used
D) The lower of the standard quantity allowed or actual quantity purchased

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated based on the actual quantity purchased, not the quantity used. This is because the price variance focuses on the difference between the actual cost of materials purchased and the expected (or standard) cost of those materials.

For Purposes of the Calculation for the Direct Materials Price