Most Companies Base the Calculation of the Material Price Variance

question 47

Multiple Choice

Most companies base the calculation of the material price variance on the:

• A)quantity of direct materials purchased.
• B)quantity of direct materials spoiled.
• C)quantity of direct materials that should have been used in achieving actual production.
• D)quantity of direct materials actually useD.
• E)quantity of direct materials to be purchased during the next accounting period.
• Units may not be the unit of measure for direct materials.

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Definitions:

Steamed Milk

Milk that has been heated and aerated through the introduction of steam, often used in coffee beverages.

Equilibrium Quantity

The quantity of goods or services supplied that is exactly equal to the quantity demanded at the market equilibrium price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in a balance between production and consumption.

Equilibrium Quantity

The volume of commodities or services provided that coincides with the volume requested at the price of market balance.