Which of the Following Combinations of Direct-Material Variances Might Prompt

question 55

Multiple Choice

Which of the following combinations of direct-material variances might prompt management to undertake a detailed variance investigation?

• A) Price, unfavorable; quantity, unfavorable.
• B) Price, unfavorable; quantity, favorable.
• C) Price, favorable; quantity, unfavorable.
• D) Price favorable; quantity, favorable.
• E) All of the answers are correct.

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Definitions:

Reactions

Responses or adjustments made by individuals, markets, or materials to external changes or stimuli.

Oligopoly

An economic condition where few companies have significant control over an industry or product, limiting competition and potentially influencing prices and production.

Herfindahl-Hirschman Index

An index used to assess the concentration of market power to determine the degree of competition in a sector.

Squared Market Shares

A measure used in economics to assess the level of market concentration by squaring the market share percentages of each firm within the industry and then summing them.