From the perspective of control, the direct materials price variance should be isolated at the time of purchase.

Question

Quizplus · Accepted Answer

Direct materials price variance is a cost variance that measures the difference between the actual price paid for direct materials and the standard price that was expected. To isolate this variance at the time of purchase, it is important to establish a standard price for the materials before purchasing and record any deviations from the standard price at the time of purchase. This allows for better tracking of the variance and helps identify areas where control can be improved.

From the Perspective of Control, the Direct Materials Price Variance