Asked by Trent Crosswell on May 27, 2024
Verified
(Actual Price - Standard Price) × Actual Quantity
A) Direct materials price variance
B) Direct labor rate variance
C) Direct labor time variance
D) Direct materials quantity variance
E) Budgeted variable factory overhead
Direct Materials Price Variance
The difference between the actual cost of direct materials and the standard cost, multiplied by the quantity purchased.
Direct Labor Rate Variance
The difference between the actual cost of direct labor and the expected (or standard) cost multiplied by the actual hours worked.
Actual Quantity
The real amount of materials, labor, or overhead used in production or service delivery, as opposed to budgeted or standard quantities.
- Absorb the theoretical framework and arithmetic involved in direct materials price variance.
Verified Answer
AC
Alanna ClinkscalesMay 30, 2024
Final Answer :
A
Explanation :
The formula (Actual Price - Standard Price) × Actual Quantity is used to calculate the Direct materials price variance, which measures the difference between what was actually paid for the materials versus what should have been paid according to the standard.
Learning Objectives
- Absorb the theoretical framework and arithmetic involved in direct materials price variance.