Question

Most companies compute the materials price variance when raw materials are _______. received from suppliers and transported to raw materials inventory. withdrawn from raw materials inventory and used in production. ordered from suppliers. moved from work in process inventory to finished goods inventory.

Answer 1

Purchased.

Step-by-step explanation:

when purchased materials are received from suppliers and transported to raw materials inventory rather than waiting to compute the price variance when the materials are withdrawn from raw materials inventory and used in production. Also, computing the price variance when the materials are purchased allows materials to be carried in the inventory accounts at their standard cost.