If the Purchasing Manager Purchased a Greater Quantity of Raw

question 86

Multiple Choice

If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the standard price, which variance would be affected?

• A)Materials price variance
• B)Materials quantity variance
• C)Both of the variances would be affected
• D)Neither of the variances would be affected

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Definitions:

TIPS Bond

Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds that are indexed to inflation in order to protect investors from the negative effects of rising prices.

Coupon Rate

The annual interest rate paid by a bond issuer to its bondholders, expressed as a percentage of the bond's face value.

Inflation Rate

The speed at which prices for products and services ascend, resulting in a decline in how much can be bought.

Market Conversion Value

The value of a convertible security if it is converted into a different form, usually stock, at its current market price.