If the actual quantity of direct materials used equals the budgeted quantity of direct materials that should have been used, any difference between the budgeted total cost and the actual total cost of direct materials used must be due to a:
A) materials quantity variance.
B) materials efficiency variance.
C) overhead variance.
D) materials price variance.

Question

Quizplus · Accepted Answer

A difference between budgeted and actual total cost of direct materials used in this scenario indicates a materials price variance, which measures the difference between the actual cost per unit of materials and the budgeted cost per unit of materials. Since the actual quantity used is the same as the budgeted quantity, there cannot be a materials quantity variance (which measures the difference between the actual quantity used and the budgeted quantity used) or a materials efficiency variance (which measures the difference between the actual hours used and the budgeted hours used to produce a unit of output). The overhead variance is not relevant in this scenario as it relates to the difference between actual and budgeted overhead costs.

If the Actual Quantity of Direct Materials Used Equals the Budgeted