Which of the Following Does Not Result in a Favorable

question 3

Multiple Choice

Which of the following does not result in a favorable direct materials price variance?

• A)The purchasing manager changed to a lower-price supplier.
• B)The purchasing manager negotiated the direct materials prices more skillfully than was planned for the budget.
• C)The purchasing manager ordered larger quantities than the quantities budgeted,and therefore obtained quantity discounts.
• D)The price of direct materials decreased as a result of industry oversupply.
• E)Budgeted purchase prices of direct materials were set too low without careful analysis of market conditions.

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Definitions:

Interest Rate

is the cost of borrowing money, expressed as a percentage of the total amount loaned, paid to lenders by borrowers for the use of the borrowed funds.

Expected Future Profits

The anticipated earnings or returns a company or investment is predicted to generate in the future, based on current trends or calculations.

Random Walk Theory

A financial theory suggesting that stock market prices evolve according to an unpredictable and random path.

Stock Prices

represent the current market value of a share of a company's stock, influenced by company performance, market trends, and investor sentiment.