If actual raw materials cost exceeds the budgeted raw materials cost, then the variance is a(n) (favorable/unfavorable) variance.

A raw materials budget variance is further analyzed into a raw materials (price/rate/spending) variance and a raw materials (usage/efficiency) variance.

The raw materials price variance is calculated at the time raw materials are (acquired/used). In contrast, the raw material purchase price variance is calculated at the time raw materials are (acquired/used).

When the actual amount spent exceeds the standard amount that should have been spent, the material spending variance is .

Multiple Choice QuestionIdentify a true statement about the raw materials purchase price variance.Multiple choice question.The formula to calculate raw materials purchase price variance reads Actual quantity allowed − Actual quantity purchased.It is the variance that is calculated and reported at the time materials are purchased rather than when they are used.The formula to calculate raw materials purchase price variance reads Standard quantity allowed − Actual quantity purchased.It is the variance that results because of the difference between actual cost and standard cost of raw materials used.

Which of the following statements is true?The materials price variance is computed based on the amount of materials purchased during the period.The standard price per unit for direct materials should reflect the final, delivered cost of the materials.In general, the production manager is responsible for the materials price variance.An unfavorable materials quantity variance occurs when the actual quantity used in production is less than the standard quantity allowed for the actual output of the period.Multiple ChoiceBoth statements 1one and 2 are true.Both statements 2 and 3 are true.All of the statements are true.None of the statements are true.