Based on business strategies, most companies compute the material price variance when materials are purchased and the material quantity variance when the materials are used.
Material Price Variance in Business is a term that is used to describe the conditions or situations when the actual price paid for materials used in production is different than the standard price for the materials.
Usually, the Material Price Variance will be considered favorable if the actual price paid for the materials is less than the standard price.
Similarly, when it comes to working hours when the standard hours allowed are lower than the actual hours used, the labor efficiency variance is labeled favorable.
Hence, in this case, it is concluded that most companies used the material price variance to determine whether there is a favorable price for their materials and used standard hours against actual hours used to determine efficiency.
Learn more about Material Price Variance here: https://brainly.com/question/16906163
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