The Direct Materials Inventory Variance Is Calculated As

question 5

Multiple Choice

The direct materials inventory variance is calculated as:

• A)(Actual Price - Standard Price)x Actual Quantity Used
• B)(Standard Price - Actual Price)x Standard Quantity Allowed
• C)(Actual Quantity Used - Actual Quantity Purchased)x Actual Price
• D)(Actual Quantity Purchased - Actual Quantity Used)x Standard Price

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Definitions:

Single Plantwide Factory Overhead Rate

A method of allocating factory overhead to products based on a single, consistent rate applicable throughout the entire manufacturing plant.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating factory overhead.

Desk Lamp Production

The process involving the assembly, testing, and packaging of desk lamps for consumer use.

Single Plantwide Factory Overhead Rate

A method of allocating total factory overhead costs to units produced, using a single rate for the entire manufacturing plant.