The flexible budget variance for materials has which of the following two components?
A)Direct materials price variance and direct materials quantity variance
B)Direct materials price variance and indirect materials price variance
C)Direct materials quantity variance and indirect materials quantity variance
D)Direct materials rate variance and direct materials quality variance

Question

Quizplus · Accepted Answer

The flexible budget variance for materials has two components, direct materials price variance and direct materials quantity variance. Direct materials price variance is the difference between the actual price paid for materials and the standard price for materials, multiplied by the actual quantity used. Direct materials quantity variance is the difference between the actual quantity of materials used and the standard quantity of materials allowed for the actual output, multiplied by the standard price per unit of materials.

The Flexible Budget Variance for Materials Has Which of the Following