alleryStart learning →Both components of the direct materials variance compare the actual figure to the:
ACompetitor figure
BIndustry average
CStandard amount
DPrior year figure
Answer & Solution
Correct answer: C. Standard amount
1. Every variance is measured against the same benchmark.
2. The two components are the price variance and the quantity variance.
3. Both compare the actual price or amount used to the standard amount.
4. The standard is the anticipated or estimated figure.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 8 'Standard Costs and Variances'_
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