Which of the following mathematical expressions is used to compute the materials usage variance?
A) (Standard Price × Actual Quantity) - (Standard Price × Standard Quantity)
B) (Fixed Price × Standard Quantity) + (Variable Price × Actual Quantity)
C) (Average Price × Average Quantity) - (Standard Price × Standard Quantity)
D) (Actual Price × Standard Quantity) + (Actual Quantity × Standard Price)
E) None of these.

Question

Quizplus · Accepted Answer

The materials usage variance compares the actual quantity of materials used to the standard quantity of materials that should have been used. This is calculated by multiplying the difference between the standard and actual quantity by the standard price per unit. Therefore, A, (Standard Price × Actual Quantity) - (Standard Price × Standard Quantity), is the correct expression.

Which of the Following Mathematical Expressions Is Used to Compute