Materials Price Variance Definition:

Materials price variance is a measure of the difference between the actual unit price paid for an item and the standard price, multiplied by the quantity purchased.

Formula of Direct Materials Price Variance:

[Materials Price Variance = (Actual quantity purchased × Actual price) − (Actual quantity purchased × Standard price)]

Learn More About Materials Price Variance:

• What is the purpose of calculating this variance?
• What is the formula of direct materials price variance?
• What is the significance of this variance?
• Who is responsible for unfavorable materials price variance?
• And examples

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