Price variances for direct materials shows how much of the total variance is due to paying higher or lower prices than expected for the direct materials purchased.

Question

Quizplus · Accepted Answer

This statement is true. Price variance for direct materials is a component of the total direct materials variance and measures the difference between the actual purchase price of materials and the expected or standard price. It can be calculated by multiplying the difference between the actual and standard price by the quantity purchased.

Price Variances for Direct Materials Shows How Much of the Total