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Which variance measures the difference between actual costs and standard costs f

Practice Questions

Q1
Which variance measures the difference between actual costs and standard costs for direct materials?
  1. Sales variance
  2. Material price variance
  3. Labor efficiency variance
  4. Overhead variance

Questions & Step-by-Step Solutions

Which variance measures the difference between actual costs and standard costs for direct materials?
  • Step 1: Understand what direct materials are. Direct materials are the raw materials used to create a product.
  • Step 2: Learn about standard costs. Standard costs are the expected costs for direct materials based on estimates.
  • Step 3: Know what actual costs are. Actual costs are the real expenses incurred for direct materials during production.
  • Step 4: Identify the variance. The variance is the difference between actual costs and standard costs.
  • Step 5: Recognize the specific type of variance for direct materials. The material price variance specifically measures this difference.
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