The direct materials flexible budget variance can be divided into which of the following two variances?

Question

Quizplus · Accepted Answer

The direct materials flexible budget variance can be divided into the price variance and the efficiency variance. The price variance measures the difference between the actual price paid for a material and the standard price for that material, while the efficiency variance measures the difference between the actual quantity of materials used and the standard quantity of materials that should have been used for the level of production achieved. Therefore, choice D (price variance and the efficiency variance) is the correct answer.

The Direct Materials Flexible Budget Variance Can Be Divided into Which