A Favorable Direct Materials Quantity Variance Indicates Which of the Following

question 251

Multiple Choice

A favorable direct materials quantity variance indicates which of the following?

• A)The actual cost of direct materials was less than the standard cost of direct materials.
• B)The Standard Quantity (SQ)of direct materials for actual output was less than the Actual Quantity (AQ)of direct materials used.
• C)The Actual Quantity (AQ)of direct materials used was less than the standard quantity for actual output.
• D)The Actual Quantity (AQ)of direct materials used was greater than the standard quantity for budgeted output.

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Definitions:

Market Demand

The total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit.

Consumer Surplus

The difference in the total amount expected to be paid by consumers for a good or service and the actual payment made.

Willingness to Pay

Willingness to Pay is the maximum amount an individual or organization is ready to spend to procure a product or service, reflecting the value they attach to it.