Material cost variance equals:
AActual price − Standard price
BStandard quantity − Actual quantity
CStandard cost − Actual cost
DActual quantity × Standard rate
Answer & Solution
Correct answer: C. Standard cost − Actual cost
1. Material cost variance compares the standard cost allowed against the actual cost incurred.
2. Symbolically: MCV = (Standard quantity × Standard price) − (Actual quantity × Actual price).
3. The other choices represent components of MCV, not the variance itself.
4. Hence MCV = Standard cost − Actual cost.
_Source: ICAI BoS Inter Paper 3, Ch 13 "Standard Costing", §13.5.1 ¶2_
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