If the actual price paid for the quantity of materials purchased is less than the actual...
If the actual price paid for the quantity of materials purchased is less than the actual quantity purchased times the standard price, then:
Question 2 options:
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The materials price variance will be favorable. |
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The materials price variance will be unfavorable. |
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The materials efficiency variance will be favorable. |
Homework Answers
Answer is: "The materials price variance will be favourable."
Explanation: If the actual price paid for the quantity of materials purchased is less than the actual quantity purchased times the standard price, then there will be a favourable material price variance since the actual cost of materials purchased is less than the cost of actual quantity of materials purchased at standard price.
Basically, this question is based upon the difference of Actual Price of materials and Standard Price of materials with actual quantity purchased placed at common which is actually Material Price Variance and if the actual price of materials is less than the standard price of materials then there will always be a favourable material price variance and vice-versa.
Formula of Material Price Variance is also given below:
Material Price Variance
= (Actual Price*Actual Quantity Purchased) - (Standard Price*Actual Quantity Purchased)
Add Answer to:
If the actual price paid for the quantity of materials purchased
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