The best label for the formula [(AP)× (AQ)- (SP)× (SQ)] is the:
A)materials quantity variance.
B)materials price variance.
C)total cost variance for materials.
D)labor efficiency variance.

Question

Quizplus · Accepted Answer

The formula [(AP) × (AQ) - (SP) × (SQ)] represents the total cost variance for materials. It calculates the difference between the actual cost of materials (AP × AQ) and the standard cost of materials (SP × SQ), where AP is the actual price per unit, AQ is the actual quantity, SP is the standard price per unit, and SQ is the standard quantity.

The Best Label for the Formula [(AP)× (AQ)- (SP)× (SQ)]