If the Purchasing Manager Purchased a Greater Quantity of Raw

question 167

Multiple Choice

If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the Standard Price (SP) , which variance may be affected?

• A)Materials price variance
• B)Materials quantity variance
• C)Both of the variances may be affected
• D)Neither of the variances may be affected

---

Definitions:

Net Income

The company's earnings following the deduction of all taxes, expenses, and costs from its total revenue.

Contribution Margin Ratio

A financial metric that measures the ability of a company to cover variable costs with its revenue.

Fixed Costs

Fixed expenses unaffected by variations in production or sales levels, like rent, wages, and insurance.

Target Income

The profit amount that a company aims to achieve within a specific period.