What is the material price variance?
A)It is the difference between the actual and standard unit price of an input multiplied by the number of inputs used.
B)It is the difference between the actual and standard unit price of an output multiplied by the number of inputs used.
C)It is the difference between the actual and standard unit price of an input multiplied by the number of inputs purchased.
D)It is the difference between the actual and standard unit price of an output multiplied by the number of inputs purchased.

Question

Quizplus · Accepted Answer

Material price variance is calculated by multiplying the difference between actual and standard price of an input by the number of inputs purchased. Therefore, option C is the most appropriate. Option A and B are incorrect because they refer to unit price of output instead of input. Option D is incorrect because it refers to the number of inputs purchased instead of used.

What Is the Material Price Variance