Question: Explain why the quantity purchased (PQ) is used in computing the direct material price variance, but the actual quantity consumed (AQ) is used in computing

Explain why the quantity purchased (PQ) is used in computing the direct material price variance, but the actual quantity consumed (AQ) is used in computing the direct-material quantity variance.

Step by Step Solution

★★★★★

3.35 Rating (161 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The directmaterial price variance is based on the quantity purchased ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

238-B-M-A-S-C (842).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Explain why the quantity of bank reserves supplied normally is higher and the quantity of bank reserves demanded normally is lower at higher interest rates.

Direct Material Price variance, Direct Material Quantity Variance, Total Direct Material variance Direct Labor rate variance, Direct labor efficiency variance, Total Direct Labor Variance Variable...

Your wealth contains 10$ and 2 items: Item 1 is worth 10$ while item 2 is worth 20$. The probability for item 1 to be lost is 10% and the probability for item 2 to be lost is also 10%. Therefore, you...

10-11. Explain why the quantity purchased (PQ) is used in computing the direct-material purchase price variance. but the actual quantity consumed (AQ) is used in con- puting the direct-material price...

1011. Explain why the quantity purchased (PQ) is used in computing the direct-material purchase price variance, but the actual quantity consumed (AQ) is used in computing the direct-material price...

Explain why the quantity purchased (PQ) is used in computing the direct-material purchase price variance, but the actual quantity consumed (AQ) is used in computing the direct-material price and...

16.18 Explain why the quantity purchased (PQ) is used in computing the direct-material price variance, but the actual quantity consumed (AQ) is used in computing the direct-material quantity variance.

Refer to Review Question 10-11. Why does an analogous question not arise in the context of the direct labor variances? Data From Review Question 10-11:- Explain why the quantity purchased (PQ) is...

X Requirements 1. What is the actual cost per gram of the special alloy that Collegiate Rings purchased last month? 2. What is the direct material price variance? 3. What is the direct material...

Ring World produces class rings. Its best-selling model has a direct materials standard of 13 grams of a special alloy per ring. This special alloy has a standard cost of $66.00 per gram. In the past...

The lower the dollar price of a peso, the higher is the quantity demanded of pesos, and the lower is the quantity supplied of pesos. Do you agree or disagree? Explain.

9. the marginal utility of money diminishes for a decision maker who is O arisk seeker. O risk neutral. O arisk averter. O in a situation of uncertainty.

Can you change attitudes toward binge drinking? A experiment designed to change attitudes about binge drinking is to be performed using college students as subjects. Discuss some variables that you...

Consider a bond paying a coupon rate of 9.75% per year semiannually when the market interest rate is only 3.9% per half-year. The bond has four years until maturity. (LO 10-6) a. Find the bonds price...

What is underapplied overhead? Over applied overhead? What disposition is made of these amounts at the end of the period?

Provide two reasons why overhead might be under applied in a given year?

HOTEL RETURN WEIGHT (proporation of portfolio) RISK (standard deviaiton fo return) Hotel X 10% 75% 3% Hotel Y 20% 25% 9% 1. Given that the standard deviation of returns on the market is 10 percent,...

Fegley, Incorporated, has an issue of preferred stock outstanding that pays a $ 6 . 7 5 dividend every year in perpetuity. If this issue currently sells for $ 9 3 per share, what is the required...

Revenue sharing happens when sponsors/dealers receive some compensation depending on which securities clients are invested in. The SEC has determined that Firm ABC is a dealer who had a conflict of...