The Formula for the Materials Quantity Variance Is

question 44

Multiple Choice

The formula for the materials quantity variance is

• A) (SQ × AP) - (SQ × SP).
• B) (AQ × AP) - (AQ × SP).
• C) (AQ × SP) - (SQ × SP).
• D) (AQ × AP) - (SQ × SP).

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Definitions:

Productive Capacity

The maximum output a system, entity, or project can produce over a specific period under normal conditions.

Direct Labor Hour

A measure of the amount of time spent by workers directly manufacturing a product or providing a service, used for cost allocation.

Fixed Factory Overhead Volume Variance

A variance that measures the difference between the budgeted and actual fixed factory overhead costs, attributing changes to fluctuations in production volume.

Fixed Overhead

Costs associated with running a business that do not change with the level of production or sales, such as rent, salaries, and insurance.