Why Is the Direct Materials Price Variance Based on the Quantity

question 72

Multiple Choice

Why is the direct materials price variance based on the quantity of materials purchased,but the direct materials quantity variance on the quantity of materials used?

• A)Managers need to isolate variances and take corrective action as soon as possible.
• B)Production managers are only interested in the quantity purchased.
• C)It is a simpler process to calculate the quantity variance on what is purchased.
• D)All of these ans choices are correct.

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