COST ACCOUNTING
STANDARD COSTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
The materials price variance may be computed by
|
|
(Actual price-Standard price) X Actual quantity used
|
|
|
(Actual price-Standard price) X Standard quantity
|
|
|
(Actual quantity-Standard quantity) X Actual price
|
|
|
(Actual quantity-Standard quantity) X Standard price
|
Explanation:
Detailed explanation-1: -Subtract actual price from budgeted price of materials per unit. The variance is the amount that the price varied, so you can find it by subtracting the actual price from the budgeted price of materials to get the magnitude of the difference.
Detailed explanation-2: -Material Cost Variance Formula = Standard Cost – Actual Cost = (SQ * SP) – (AQ * AP)
Detailed explanation-3: -A material quantity variance is the difference between the actual amount of materials used in the production process and the amount that was expected to be used. The measurement is employed to determine the efficiency of a production process in converting raw materials into finished goods.
There is 1 question to complete.