When the quantity of materials purchased and materials used is different, which of the following is more relevant for the purpose of calculating the direct materials price variance?
A) Standard quantity allowed
B) Actual quantity purchased
C) Actual quantity used
D) The lower of the standard quantity allowed and the actual quantity purchased

Question

Quizplus · Accepted Answer

The direct materials price variance is calculated based on the actual quantity purchased and the standard price, as it measures how much more or less the company paid for the materials than expected, regardless of how much of those materials were actually used in production.

When the Quantity of Materials Purchased and Materials Used Is