The formula to compute direct materials price variance is:
A) actual costs - (actual quantity × standard price).
B) actual cost + standard costs.
C) actual cost - standard costs.
D) (actual quantity × standard price) - standard costs.

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated as the difference between the actual cost of materials and what the cost should have been for the actual quantity purchased, which is represented by the formula: actual costs - (actual quantity × standard price).

The Formula to Compute Direct Materials Price Variance Is