The Procurement Manager Was Able to Bring Down the Cost

question 148

Multiple Choice

The procurement manager was able to bring down the cost of direct materials by purchasing materials of a slightly lower grade quality than the company had used previously. The lower grade of materials, however, meant a higher defect rate on the assembly line, and higher wastage of materials during production, which in turn lowered operating income. This situation would have led to a(n) :

• A)unfavorable direct materials cost variance.
• B)favorable direct labor cost variance.
• C)unfavorable direct labor efficiency variance.
• D)unfavorable direct materials efficiency variance.

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Definitions:

Invitees

Individuals who are invited onto a property for the benefit of the property owner, having a higher level of protection under premises liability laws.

Risk Of Harm

The potential for injury, damage, or adverse effects in a particular situation or from a specific action.

Duty To Protect

A legal obligation imposed on individuals or entities, requiring them to take reasonable steps to protect others from foreseeable harm.

Assumption Of Risk

A traditional defense to negligence liability based on the argument that the plaintiff voluntarily exposed himself to a known danger created by the defendant’s negligence.