Using the standard cost for raw materials in the ledgers allows managers to identify the price variance during the period in which the variance occurred.

Question

Quizplus · Accepted Answer

Using standard costs for raw materials in the ledgers enables managers to compare the actual costs incurred to the standard costs predetermined. This comparison helps in identifying the price variance (the difference between the actual cost and the standard cost) during the specific period in which the variance occurred, facilitating timely management decisions and adjustments.

Using the Standard Cost for Raw Materials in the Ledgers