Byron Products Has a Favourable Materials Price Variance

question 60

Multiple Choice

Byron Products has a favourable materials price variance.Which of the following would be the least likely reason for this variance?

• A) The company overbudgeted the standard price for materials.
• B) The company took advantage of purchase discounts from their suppliers.
• C) The company's employees were more efficient with the use of their production time.
• D) The company purchased a substandard material at a cheaper price.

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Definitions:

Nominal

Referring to amounts or prices that have not been adjusted for inflation, representing face value rather than real value.

Unexpected Decrease

A sudden and unforeseeable reduction in value, amount, or number, often affecting financial markets or specific assets.

Market Interest Rates

The prevailing rates at which borrowers and lenders execute lending transactions in the market. It reflects the cost of borrowing money in the financial markets.

Positive Covenant

An agreement in a loan contract that requires the borrower to perform specific actions.