When the Quantity of Materials Purchased Is Not Equal to the Quantity

question 56

Multiple Choice

When the quantity of materials purchased is not equal to the quantity of material used,most companies base the calculation of the material quantity variance on the:

• A)quantity of direct materials purchased.
• B)quantity of direct materials spoiled.
• C)quantity of direct materials that should have been used in achieving actual production.
• D)quantity of direct materials actually useD.
• E)Leave answer E as originally written.
• Units may not be the unit of measure for direct materials.

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Definitions:

Wages and Income

Represents the earnings received by laborers for their work and can include salaries, wages, and other forms of compensation.

Circular-Flow Diagram

A visual model that shows how goods, services, and money move through the economy in a continuous, circular flow between households and firms.

Money

A medium of exchange used to facilitate transactions for goods and services.

Goods and Services

The products and activities offered by businesses to satisfy economic needs or wants; goods are tangible items, while services are intangible acts or performances.