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

Question

Quizplus · Accepted Answer

The direct materials usage variance is calculated based on the actual quantity of materials used in production compared to the standard quantity expected to be used for the actual output. It measures efficiency in using materials, hence the relevance of the actual quantity used.

For Purposes of the Calculation for the Direct Materials Usage