Which of the following equations measures a price variance?
A)AQ × (AP − SP)
B)SP × (AQ − SQ)
C)SQ × (AP − SP)
D)(AQ − SQ) × (AP − SP)

Question

Quizplus · Accepted Answer

A price variance measures the difference between the actual price paid for something and the standard (or expected) price, multiplied by the actual quantity purchased. The formula AQ × (AP − SP) captures this, where AQ is the actual quantity, AP is the actual price, and SP is the standard price.

Which of the Following Equations Measures a Price Variance