EXERCISE 10-15 (CONTINUED) ALTERNATIVE SOLUTION

1. a. In the solution below, the materials price variance is computed on the entire amount of materials purchased whereas the materials quantity variance is computed only on the amount of materials used in pro-duction: Actual Quantity of Standard Quantity Actual Quantity Allowed for Output, at of Input, at Input, at Standard Price Actual Price (AQ × AP) (AQ × SP) (SQ × SP)