When using a standard costing system,the direct materials price variance is recorded at the time direct materials are purchased.

Question

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The direct materials price variance is recorded at the time of purchase in a standard costing system because it compares the actual price paid for materials with the standard price that was established for that material. This variance is used to determine whether the company paid more or less than expected for the materials, which can impact the product's overall cost.

When Using a Standard Costing System,the Direct Materials Price Variance