The materials price variance should be computed:
A) when materials are purchased.
B) when materials are used in production.
C) based upon the amount of materials used in production when only a portion of materials purchased is actually used.
D) based upon the difference between the actual quantity of inputs and the standard quantity allowed for output times the standard price.

Question

Quizplus · Accepted Answer

The materials price variance should be computed when materials are purchased, as it compares the actual price paid for materials to the standard price, allowing adjustments to be made for future purchases.

The Materials Price Variance Should Be Computed