The difference between the actual quantity of a raw material used and the standard quantity allowed, weighted by the standard price measures the:
A) Material usage variance.
B) Material price variance.
C) Target cost of the raw material.
D) Engineering standard for the raw material.

Question

Quizplus · Accepted Answer

Material usage variance is calculated by taking the difference between the actual quantity of material used and the standard quantity expected to be used, and then multiplying this difference by the standard price per unit of material. This variance helps in analyzing the efficiency in using materials in the production process.

The Difference Between the Actual Quantity of a Raw Material