he spending variance is Blank______.Multiple choice question.(AQ × AP) − (SQ × SP)(AQ × SP) − (SQ × SP)(AQ × AP) − (AQ × SP)
Question
he spending variance is Blank______.Multiple choice question.(AQ × AP) − (SQ × SP)(AQ × SP) − (SQ × SP)(AQ × AP) − (AQ × SP)
Solution
The spending variance is calculated using the formula (AQ × AP) − (SQ × SP).
Here's a step-by-step breakdown:
- AQ stands for Actual Quantity of resources used.
- AP stands for Actual Price of resources used.
- SQ stands for Standard Quantity of resources that should have been used.
- SP stands for Standard Price of resources.
First, you multiply the Actual Quantity (AQ) by the Actual Price (AP).
Second, you multiply the Standard Quantity (SQ) by the Standard Price (SP).
Finally, you subtract the second result from the first to get the spending variance.
So, the correct answer is (AQ × AP) − (SQ × SP).
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