Which Formula Is Used to Calculate the Materials Usage Variance

question 27

Multiple Choice

Which formula is used to calculate the materials usage variance?

• A)(standard price × actual quantity) − (standard price × standard quantity)
• B)(standard price × standard quality) − (standard price × actual quantity)
• C)(actual price × actual quantity) − (standard price × actual quantity)
• D)(actual price × standard quantity) − (actual quantity × standard price)

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Definitions:

Elastic Segment

refers to a section of the demand curve where consumers are relatively responsive to price changes, indicating that the price elasticity of demand is greater than one.

Total Revenue

The overall amount of money generated by a firm from its sales activities, calculated as the unit price times the quantity of goods sold.

Natural Monopolies

Industries where a single firm can supply a product or service to an entire market at a lower cost than any potential competitor, often due to economies of scale.

Extensive Economies of Scale

Refers to reductions in per-unit cost as the size of a firm or its level of production increases.