What formula is used to determine the usage variance?
A)(AQ − SQ)SP
B)(SQ − AQ)SP
C)(AQ − AQ)SP
D)(SQ + AQ)SP

Question

Quizplus · Accepted Answer

The usage variance formula is (AQ − SQ)SP, where AQ is the actual quantity of input used, SQ is the standard quantity allowed for the actual output, and SP is the standard price per unit of input. This formula calculates the difference between what was actually used and what should have been used, multiplied by the standard cost per unit.

What Formula Is Used to Determine the Usage Variance