If the Price Paid Per Unit Differs from the Standard

question 123

Multiple Choice

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

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

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Definitions:

Accounts Payable Balance

The total amount owed by a company to its suppliers or creditors for items or services purchased on credit.

Raw Materials Purchases

The total cost or expenditure associated with buying raw materials that will be used in producing goods.

Estimated Direct Labor Cost

The forecasted cost associated with the labor directly involved in the manufacturing of goods.

Budgeted Required Production

The estimated amount of goods or services that a business plans to produce in a specific period, as determined by budgeting processes.