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)Direct material rate variance and direct material quality variance

Question

Quizplus · Accepted Answer

The flexible budget variance for materials has 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 price, while direct material quantity variance measures the difference between the actual quantity used and the expected quantity. Therefore, option A is the correct choice. Options B, C, and D are incorrect because they either include indirect material variances, which are not included in the flexible budget variance for materials, or they mix up the variance components by combining price and quantity variances for different types of materials.

The Flexible Budget Variance for Materials Has Which of the Following