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View Full Version : Standard cost variance


roulette13
Apr 2, 2008, 09:15 AM
In using standard cost, what is materials price variance?

hellsailor
Apr 2, 2008, 01:58 PM
Direct materials price variance shows the effect on profit of paying more or less for the material than the price used in the budget.
The formula used for this variance is (SP-AP)AM
where SP = standard price
AP = actual price paid,
AM = actual quantity of materials used