Explore BrainMass

Explore BrainMass

    Price variance and quantity variance.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Explain why the quantity purchased is used in computing the direct materials price variance, but the actual quantity consumed is used in computing the direct materials quantity variance. Why does an analogous question not arise in the context of the direct labor variance?

    © BrainMass Inc. brainmass.com June 4, 2020, 2:48 am ad1c9bdddf

    Solution Preview

    The price variance from standard is known as soon as the materials are purchased and so the full impact of the variance is on the amount purchased.

    The quantity used is not known at the time of the purchase and so it is ...

    Solution Summary

    Your tutorial tells you why the amount purchases and the amount used differ and why this does not arise for labor.