Question

The materials price variance should be computed:

Group of answer choices

Only when materials purchased are entirely used in the same period.

Only when there is a significant difference between standard and actual price per unit for the materials.

when materials are used in production.

when materials are purchased.

Answer 1

The Answer is When materials are purchased.

1) Material price variance discuss about differences between actual cost of material and budgeted cost of material multiplied by actual direct material purchased.

2) It mainly focus price at the time of purchase of material and budgeted price.

3) So, After purchase itself we can compare the prices and define the material price variance.

4) To calculate material price variance, there is no need to start or complete production or significant differs in prices. So, Remaining options are Incorrect.