Use the Information Below to Answer the Following Questions

question 37

Multiple Choice

Use the information below to answer the following questions.
-Refer to the table above. The raw materials variance can best be described as:

• A) an adverse variance resulting from excessive use of raw materials.
• B) a favourable variance resulting from efficient use of raw materials.
• C) an adverse variance resulting from a rise in the price of raw materials.
• D) an adverse variance resulting from excessive use of raw materials and/or an increase in their price.

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Definitions:

Operating Activities

Business activities directly related to the production and delivery of goods and services, impacting the operating income.

Direct Method

The direct method is a way of preparing the cash flow statement that involves listing all the major operating cash receipts and payments during the period, showing the net cash provided by operating activities.

Operating Expenses

Recurring expenses incurred through normal business operations, such as rent, utilities, and payroll, excluding COGS.

Cash Payments

Transactions that involve the direct transfer of money to settle obligations, including expenses, debts, or purchases, without the use of credit.