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

Question

Quizplus · Accepted Answer

The increase in the price of milk directly affects the materials price variance, which measures the difference between the actual cost of materials purchased and the expected cost. When the price of a material increases, the materials price variance will be unfavorable, as the actual cost will be higher than the expected cost.

A Company Uses Milk in Producing Its Product