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-Refer to the above diagram.The marginal propensity to consume is:
Direct Materials Purchases Variance
This term refers to the difference between the actual cost of materials purchased and the expected (standard) cost of materials needed to manufacture the products during a specific period.
Materials Price Variance
The difference between the actual cost of materials and the expected (standard) cost.
Raw Material
The basic material from which a product is made, used in the initial stages of production.
Materials Price Variance
The difference between the actual cost of materials and the standard cost multiplied by the quantities purchased.
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