A Favorable Price Variance for Direct Materials Indicates That

question 43

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• B)The materials standard is likely out of date.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 should have been used.
• E)There will most likely be an unfavorable materials efficiency (quantity)variance.

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Definitions:

Retailers

Intermediaries who buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products.

Ultimate Consumers

The end-users or buyers who purchase products or services for personal use and not for manufacturing or resale purposes.