An Unfavorable Materials Quantity Variance Indicates That

question 234

Multiple Choice

An unfavorable materials quantity variance indicates that:

• A) actual usage of material exceeds the standard material allowed for output.
• B) standard material allowed for output exceeds the actual usage of material.
• C) actual material price exceeds standard price.
• D) standard material price exceeds actual price.

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Definitions:

Profits

Financial gains obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operation.

Farmer

An individual engaged in the practice of raising crops or livestock, typically for food or raw materials.

Profit-Maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Per-Bushel Profit

The financial gain earned by selling a bushel (a unit of measure for volume) of agricultural produce, after subtracting the cost of production.