The materials purchase price variance, in a standard cost system, is obtained by multiplying the: Group of answer choices a. Actual price by the difference between actual quantity purchased and standard quantity used. b. Actual quantity purchased by the difference between actual price and standard price. c. Standard price by the difference between standard quantity purchased and standard quantity used. d. Standard quantity purchased by the difference between actual price and standard price.

Question

Business

Deven Leonard

1 August, 17:10

The materials purchase price variance, in a standard cost system, is obtained by multiplying the: Group of answer choices a. Actual price by the difference between actual quantity purchased and standard quantity used. b. Actual quantity purchased by the difference between actual price and standard price. c. Standard price by the difference between standard quantity purchased and standard quantity used. d. Standard quantity purchased by the difference between actual price and standard price.

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Answers (1)

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Malakai Calderon · Answer 1

b. Actual quantity purchased by the difference between actual price and standard price

Explanation:

The formula to compute the material purchase price is shown below:

= Actual Quantity * (Standard Price - Actual Price)

It is derived by taking a difference between the standard price and the actual price and then multiplying it by the actual quantity so that the material price or material purchase price variance could come

Hence, the correct option is b.