Why is the point of purchase the best time to compute material price variances?
A)This is when the company is able to determine the total cost of production.
B)This is when the cost of material will be known.
C)This is when the company knows the amount of materials used in production.
D)This is the only point when the company is able to determine a standard material price.

Question

Quizplus · Accepted Answer

The point of purchase is the best time to compute material price variances because it is when the cost of material will be known. This allows the company to compare the actual cost of materials purchased to the standard cost of those materials and determine the material price variance.

Why Is the Point of Purchase the Best Time to Compute