If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is termed a:
A) controllable variance
B) price variance
C) quantity variance
D) rate variance

Question

Quizplus · Accepted Answer

If the actual quantity of direct materials used in production differs from the standard quantity, the resulting variance is called a quantity variance. The controllable variance refers to the difference between actual and budgeted costs that occur because of management's actions, while the price variance reflects the difference between the actual price paid for direct materials and the standard price. The rate variance is the difference between the actual hourly rate paid to workers and the standard hourly rate.

If the Actual Quantity of Direct Materials Used in Producing