why are separate price and quantity variances computed

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  • How do you find the quantity variance from the cost?

  • Thus, the amount of the quantity variance is multiplied by the standard cost per unit. A separate variance, the rate variance, is used to derive any difference between the actual and standard price per unit. Quantity Variance Example.

  • What is the relationship between rate variance and quantity variance?

  • Thus, the amount of the quantity variance is multiplied by the standard cost per unit. A separate variance, the rate variance, is used to derive any difference between the actual and standard price per unit.

  • What is a quantity variance for direct materials?

  • Thus, a quantity variance for direct materials involves a baseline that is derived from the bill of materials for a product, which in turn is based on an engineering estimate of the quantity needed, factoring in a certain amount of standard scrap or spoilage.

  • What is the difference between quantity standard and price standard?

  • A quantity standard is the amount of materials that should be used in the production of a single unit. Price standard is the price that should be paid for materials at a given level of activity.

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