The direct materials price variance is usually based on materials purchased, rather than on materials used.

Question

Quizplus · Accepted Answer

The direct materials price variance is typically calculated based on the quantity of materials purchased during a period and the difference between the actual price paid and the standard (or expected) price. This approach is used because it isolates the variance to the purchasing function, focusing on the efficiency and effectiveness of the purchasing department in obtaining materials at the expected cost.

The Direct Materials Price Variance Is Usually Based on Materials