A Favorable Direct Materials Price Variance and an Unfavorable Direct

question 20

Multiple Choice

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?

• A)Less expensive, inferior materials requiring less than the standard amount were used in production.
• B)Less expensive, inferior materials requiring more than the standard amount were used in production.
• C)More expensive, superior materials requiring more than the standard amount were used in production.
• D)More expensive, superior materials requiring less than the standard amount were used in production.

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Definitions:

Prevention Costs

Costs associated with actions taken to avoid defects in products or services before they happen.

Appraisal Costs

Costs associated with evaluating and inspecting products or services to ensure they meet quality standards.

Quality Cost Report

A summary of the total expenses associated with preventing, detecting, and correcting defects in products, including appraisal, prevention, and failure costs.

Prevention Costs

Expenses incurred to prevent defects in products or services, including costs of quality planning, training, and preventive maintenance.