Question

A total materials variance is analyzed in terms of quantity and quality variances. tight and loose variances. price and quantity variances. buy and sell variances.

Answer 1

A total materials variance is analyzed in terms of price and quantity variances, which are essential for determining a firm's cost structure and are linked to average total cost, average variable cost, and marginal cost.

Step-by-step explanation:

A total materials variance is analyzed in terms of price and quantity variances. The price variance reflects the difference between the actual cost of materials and the standard cost expected by the firm, indicating whether the firm has paid more or less for its materials than planned. The quantity variance, on the other hand, shows the difference between the actual amount of materials used and the amount that should have been used according to standards, which helps in judging the efficiency of material usage. These variances are critical in long-run production decisions as they influence the average total cost, average variable cost, and marginal cost of products, which in turn affect pricing strategies and profit maximization.

Answer 2

price and quantity variances.

Step-by-step explanation:

In Financial accounting, costing is the measurement of the cost of production of goods and services by assessing the fixed costs and variable costs associated with each step of production.

Manufacturing costs can be defined as the overall costs associated with the acquisition of resources such as materials and the cost of converting these raw materials into finished goods. Manufacturing costs include direct labor costs, direct materials cost and manufacturing overhead costs.

Total direct materials variance gives the difference between the budgeted cost and actual cost of a unit of goods produced.

Generally, a total materials variance is analyzed in terms of price and quantity variances used by a manufacturer in the manufacturing of a particular product.