The Procurement Manager Was Able to Bring Down the Cost

question 51

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

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Definitions:

Strict Hierarchy

A rigid organizational structure where each level is clearly defined and ranks above or below others in authority.

Clearly Drawn Rules

Explicit and well-defined guidelines or principles that govern behavior and processes.

Denomination

A recognized autonomous branch within a religion, characterized by its own unique beliefs, practices, and governance.

State-supported Churches

Religious organizations that receive financial aid and legal recognition from the government, often with historical ties to the state.