Question

The direct material quantity variance can be defined as which of the​ following? A. Actual price x​ (Actual quantity used​ - Standard quantity​ allowed) B. Actual quantity purchased x​ (Actual price​ - Standard​ price) C. Standard quantity allowed x​ (Actual price​ - Standard​ price) D. Standard price x​ (Actual quantity used​ - Standard quantity​ allowed)

Answer 1

D. Standard price x​ (Actual quantity used​ - Standard quantity​ allowed)

Step-by-step explanation:

Direct material quantity variance measures the difference between the standard quantity to be used for actual out and actual quantity at the rate of Standard price.

This variance depicts the wastage and excess or less usage of raw material quantity as compared to that required.

This is calculated for standard price, as actual cost is compared to standard cost in direct material cost variance, this is only to calculate the quantity variance.

Correct Answer

D. Standard price x​ (Actual quantity used​ - Standard quantity​ allowed)