Final answer:
The materials price variance should be calculated at the point of purchase if the materials quantity variance is significant. It should be controllable by operating managers and provide timely information for control purposes.
Step-by-step explanation:
When calculating the materials price variance for control purposes, it is usually preferable to calculate it at the point of purchase (i.e., when the materials are purchased). This allows for better tracking of the actual cost of the materials. However, the materials price variance should only be calculated if the materials quantity variance is significant in amount, meaning that there is a noticeable difference in the amount of materials used compared to what was expected.
Calculating the materials price variance at the point of production (i.e., when the materials are issued to production) is not as preferable because it may not accurately reflect the actual cost of the materials if there are delays or price changes between the purchase and the production stage. Additionally, it should only be calculated if it is controllable by operating managers, meaning that they have the authority to make decisions that can impact the price of the materials.
Calculating the materials price variance at the end of the accounting period may not provide timely information for control purposes, as it may not reflect current market prices or changes in materials usage.