What cost accounting variance measures the difference between actual direct material price paid and standard price expected per unit of material?

Explanation

• Material Price Variance formula: $text{Price Variance} = (text{Actual Price} – text{Standard Price}) times text{Actual Quantity Purchased}$.
• A favorable price variance occurs when actual purchase price per unit is below standard estimated price.
• Purchasing departments are typically held responsible for material price variances.