Which of the Following Is a Possible Reason Why Actual

question 164

Multiple Choice

Which of the following is a possible reason why actual prices might differ from standard prices, resulting in a direct materials price variance?

• A)The company may order more materials than it expects to use.
• B)The company may receive more materials than ordered.
• C)The vendors may change their prices as a result of changes in the market.
• D)The company may purchase fewer materials than used.

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Definitions:

Total Revenue

The complete financial income a company collects from the marketplace by selling its goods or services, before any outlays are subtracted.

Total Cost

The sum of all costs incurred by a business in producing a specific level of output, including both fixed and variable costs.

Purely Competitive Firm

A market structure characterized by a large number of small firms, producing homogenous products, with no single firm able to influence market prices due to perfect competition.

Exchange Rate

The value at which one currency can be exchanged for another, influencing international trade and investment.