The materials price variance is the difference between the actual price of materials Blank______.
Question
The materials price variance is the difference between the actual price of materials Blank______.
Solution
The materials price variance is the difference between the actual price of materials and the standard cost of those materials. Here are the steps to calculate it:
-
Determine the standard cost of materials: This is the cost that the company expects to pay for the materials. It is usually determined based on market prices or past purchase prices.
-
Determine the actual cost of materials: This is the cost that the company actually paid for the materials. It can be found on the purchase invoices or receipts.
-
Subtract the standard cost from the actual cost: This will give you the materials price variance. If the result is positive, it means that the company paid more for the materials than expected (unfavorable variance). If the result is negative, it means that the company paid less for the materials than expected (favorable variance).
Similar Questions
The materials price variance is calculated using the Blank______ quantity of the input purchased.
If actual raw materials cost exceeds the budgeted raw materials cost, then the variance is a(n) (favorable/unfavorable) variance.
A raw materials budget variance is further analyzed into a raw materials (price/rate/spending) variance and a raw materials (usage/efficiency) variance.
When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .
Variances are the difference between actual results and budgeted results.Group startsTrue or FalseTrue, unselectedFalse, unselected
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.