a price variance is the difference between the blank______.
A price variance is the difference between the blank______
Answer:
A price variance is the difference between the actual cost incurred and the standard cost expected for a product or service. It is a term commonly used in managerial accounting to analyze and understand the differences in costs. The formula to calculate price variance is as follows:
Price Variance = (Actual Price - Standard Price) x Actual Quantity
This variance helps organizations identify whether they are spending more or less than expected on direct materials, direct labor, or other costs. By analyzing price variances, businesses can take appropriate actions to control costs, improve efficiency, and make informed decisions to enhance profitability.