A company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted?

Question

Quizplus · Accepted Answer

If the price of sugar doubles, it directly affects the materials price variance. This variance measures the difference between the actual cost paid for the materials and the budgeted cost, so an increase in the cost of sugar would cause this variance to increase, assuming all other factors remain constant.

A Company Uses Sugar in Producing Its Product