Question

The formula for the materials quantity variance is

1)(SQ × AP) - (SQ × SP).
2)(AQ × AP) - (AQ × SP).
3)(AQ × SP) - (SQ × SP).
4)(AQ × AP) - (SQ × SP).

Answer 1

The materials quantity variance is calculated by the formula (AQ × SP) - (SQ × SP), showing the efficiency in material usage by comparing actual and standard quantities at standard price.

Step-by-step explanation:

The correct formula for calculating the materials quantity variance is (AQ × SP) - (SQ × SP). This formula computes the difference between the actual quantity of the materials used multiplied by the standard price (AQ × SP), and the standard quantity allowed for the actual production multiplied by the standard price (SQ × SP). The variance shows how much the actual usage of materials deviates from the standard usage that was expected, and it measures efficiency in the use of materials for production.