Question

The total materials variance is equal to the Select one: a. difference between the materials price variance and materials quantity variance. b. materials price variance. c. product of the materials price variance and the materials quantity variance. d. sum of the materials price variance and the materials quantity variance.

Answer 1

d. sum of the materials price variance and the materials quantity variance.

Step-by-step explanation:

Total variance: The total variance comprises of material price variance and the material quantity variance.

In mathematically,

Total variance = Material price variance + material quantity variance

where,

Material price variance= Actual Quantity × (Standard Price - Actual Price)

And, the material quantity variance = Standard Price × (Standard Quantity - Actual Quantity)