If the Price Paid Per Unit Differs from the Standard

question 5

Multiple Choice

If the price paid per unit differs from the standard price per unit for direct materials, the variance is a

• A) variable variance
• B) controllable variance
• C) price variance
• D) volume variance

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Definitions:

Unit Sold

The quantity of items or products that have been sold.

Direct Manufacturing Cost

The sum of all the cost components that are directly attributable to the production process, including direct materials and direct labor.

Units Produced

The total number of units of a product that have been manufactured during a specific period.

Manufacturing Overhead Costs

The indirect costs associated with manufacturing, including costs related to running the factory floor that are not directly traceable to specific units of products.