Multiple Choice Question

Identify a true statement about the raw materials purchase price variance.

It is the variance that is calculated and reported at the time materials are purchased rather than when they are used.

The formula to calculate raw materials purchase price variance reads Standard quantity allowed $-$ Actual quantity purchased.

The formula to calculate raw materials purchase price variance reads Actual quantity allowed $-$ Actual quantity purchased.

It is the variance that results because of the difference between actual cost and standard cost of raw materials used.