If the price paid per unit differs from the standard price per unit for direct materials, the variance is termed:
A) variable variance.
B) controllable variance.
C) price variance.
D) volume variance.

Question

Quizplus · Accepted Answer

The variance described is the difference between the actual price paid per unit for direct materials and the standard price per unit. This is known as the price variance, which is a type of cost variance that is used to analyze the difference between the actual and expected cost of goods and services. The controllable and variable variances refer to different types of overhead costs, while the volume variance refers to differences in production levels.

If the Price Paid Per Unit Differs from the Standard