The materials price variance is computed using the equation
A) (Actual Price * Actual Quantity) - (Standard Price * Standard Quantity).
B) (Standard Price * Actual Quantity) - (Actual Price * Actual Quantity).
C) (Standard Price * Standard Quantity) - (Actual Price *Actual Quantity).
D) (Actual Price * Actual Quantity) - (Standard Price * Actual Quantity).
E) None of these.

Question

Quizplus · Accepted Answer

The materials price variance is calculated as the difference between the actual cost of materials purchased and the standard cost of those materials, based on the actual quantity purchased. This is represented by the formula: (Actual Price × Actual Quantity) - (Standard Price × Actual Quantity), which matches choice D.

The Materials Price Variance Is Computed Using the Equation