Which of the Following Is Not True Concerning Direct Materials

question 73

Multiple Choice

Which of the following is not true concerning direct materials variances?

• A) The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.
• B) The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used.
• C) The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased.
• D) The materials usage variance uses the actual quantity of materials used.
• E) Separate materials variances can be computed for each type of material used.

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Definitions:

Herfindahl Index

An index reflecting the scale of companies compared to the entire sector and a sign of the level of competitive activity present.

Pure Monopolist

A market structure where a single firm is the sole producer and seller of a product or service without close substitutes, giving it significant market power.

Market Shares

The percentage of an industry's total sales that is earned by a particular company over a specified time period, indicating the company's size or presence in the market.

Interindustry Competition

The competitive relationship between firms or industries producing different goods or services that, while not direct substitutes, compete for the same consumer dollars.