How Is the Direct Materials Price Variance Calculated

question 108

Multiple Choice

How is the direct materials price variance calculated?

• A) The difference in quantities multiplied by the actual price of the input
• B) The difference in prices multiplied by the actual quantity of the input
• C) The actual amount of direct materials purchased divided by the actual quantity
• D) The actual quantity of direct materials purchased divided by the per unit price

---

Definitions:

Organizational Hierarchy

A system in which people within an organization are ranked according to levels of authority and responsibility.

Encoding

The process of converting information into a form that can be stored in memory or communicated to others.

Decoding

The process of interpreting and making sense of messages or information received.

Downward Communication

The process of information flow from higher managerial or organizational levels to lower levels, typically involving directives, instructions, and policy announcements.