When the quantity of materials purchased and materials used is different, which of the following is more relevant for the purpose of calculating the direct materials usage variance?
A) Actual quantity purchased
B) Actual quantity used
C) The lower of standard quantity allowed and actual quantity purchased
D) The lower of actual quantity used and actual quantity purchased

Question

Quizplus · Accepted Answer

The direct materials usage variance is calculated to analyze the efficiency in using materials for production. It compares the actual quantity of materials used to the standard quantity that should have been used for the actual output. Therefore, the actual quantity used is more relevant for this calculation.

When the Quantity of Materials Purchased and Materials Used Is