The Formula to Compute Direct Material Quantity Variance Is

question 173

Multiple Choice

The formula to compute direct material quantity variance is:

• A) actual costs - standard costs.
• B) standard costs - actual costs.
• C) (actual quantity × standard price) - standard costs.
• D) actual costs - (standard price × standard costs).

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Definitions:

Manufacturers

Entities or individuals that produce goods using raw materials and labor, often involving machinery and equipment.

Factory Overhead

Indirect costs related to manufacturing that cannot be directly associated with specific product units, including rent, utilities, and maintenance of equipment.

Labor Costs

The total sum of all wages, benefits, and taxes paid to employees by an employer for work performed.

Period Costs

Expenses that are not directly tied to production activity and are charged to the period in which they are incurred.