COST ACCOUNTING
STANDARD COSTING
Question
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The formula for the direct materials quantity variance is
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(AP × SQ)-(SP × SQ)
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(AP × AQ)-(SP × AQ)
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(SP × AQ)-(SP × SQ)
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(AP × AQ)-(SP × SQ)
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Explanation:
Detailed explanation-1: -Direct Material Cost Variance = Standard cost of direct materials specified for actual output achieved-Actual cost of direct materials used. The standard cost of direct material is: Standard quantity of direct materials x Standard price per unit of direct materials.
Detailed explanation-2: -Calculate quantity variance: To complete the calculation, subtract the standard quantity used from the actual quantity used, then multiply that number by the cost per unit.
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