A Favorable Price Variance for Direct Materials Indicates That

question 26

Multiple Choice

A favorable price variance for direct materials indicates that:

• A) Lower-quality materials were purchased.
• B) The materials standard is likely out of date.
• C) A lower price than expected was paid for the materials.
• D) Less material was used in production this period than was allowed.
• E) There will most likely be an unfavorable materials efficiency (quantity) variance.

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Definitions:

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