The flexible budget variance for materials has which of the following two components?
A)Direct material price variance and direct material quantity variance
B)Direct material price variance and indirect material price variance
C)Direct material quantity variance and indirect materials quantity variance
D)None of these ans choices are correct

Question

Quizplus · Accepted Answer

The flexible budget variance for materials is the difference between the flexible budget for materials and the actual cost of materials. This variance includes two components: direct material price variance and direct material quantity variance. Direct material price variance measures the difference between the actual price paid for materials and the expected or standard price of materials. Direct material quantity variance measures the difference between the actual quantity of materials used and the expected or standard quantity of materials used. Therefore, option A is the best choice.

The Flexible Budget Variance for Materials Has Which of the Following