Question

Material Usage Variance $=$ ____________.

• A. Standard Usage $-$ Actual Usage
• B. (Standard Price - Actual Usage) ×× Standard Price
  
• C. Standard Quantity
• D. Actual Quantity

Answer 1

Answer: (A)

Standard Usage $-$ Actual Usage

In case of the variance between the standard cost of material and actual cost of material , there will be a variance between standard cost of material and actual cost of material. Material cost variance arises due to price variation or usage variation.

Material usage variance is the difference between standard usage and actual usage multiply by standard price.

Material Usage Variance $=$ (Standard usage-Actual usage) $\times$ Standard Price.