The Direct Materials Price Variance Compares

question 83

Multiple Choice

The direct materials price variance compares:

• A) The standard price for labour with the actual price paid
• B) The standard price for direct materials with the actual price paid
• C) How efficiently labour is used
• D) How efficiently direct materials are used

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Definitions:

Direct Labor

The labor cost of workers who are directly involved in the production or manufacture of goods or services.

Work in Process

Partially finished goods that are still in the process of production. They are considered an asset on the company's balance sheet.

Manufacturing Overhead

All indirect costs related to the production process, including utilities, depreciation on equipment, and factory maintenance, not directly tied to specific units of output.

Schedule of Cost

A detailed report of the total costs involved in a project or the production of goods over a specific period.