The direct materials price variance is calculated as

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated by determining the difference between the actual price paid for the materials and the standard price expected, then multiplying that difference by the actual quantity of materials purchased. Choice A is incorrect because it refers to the quantity variance. Choice B is incorrect because it involves dividing the actual amount purchased by the quantity, rather than comparing it to the expected or standard price. Choice D is also incorrect because it involves dividing the actual quantity by the per unit price, rather than comparing it to the expected or standard price.

The Direct Materials Price Variance Is Calculated as