The Direct Material Price Variance Is Based on the Quantity

question 71

True/False

The direct material price variance is based on the quantity of materials purchased when the quantity purchased is different from the quantity used.

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Definitions:

Present Value

The current value of a future amount of money or stream of cash flows, discounted at a particular interest rate.

Simple Interest

Interest assessed only on the principal sum, or on the part of the principal that still needs to be repaid.

Principal Amount

The original sum of money borrowed in a loan or invested, distinct from interest or profit earned.

Invested

To be invested refers to the allocation of resources, such as capital or time, into a particular venture, asset, or effort with the expectation of generating a future return.