What Does a Favourable Direct Materials Price Variance Indicate

question 257

Multiple Choice

What does a favourable direct materials price variance indicate?

• A) The actual cost of materials purchased was greater than the standard cost of materials purchased.
• B) The standard cost of materials purchased was less than the actual cost of materials purchased.
• C) The standard cost of materials purchased was greater than the actual cost of materials purchased.
• D) The actual quantity of materials used was less than the standard quantity of materials used for actual production.

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Definitions:

Legitimacy

The rightful status, accepted and recognized by the public or law, that gives a government or ruling body authority over its subjects.

Liberty

The condition of liberty in society from authoritarian limitations on one's lifestyle, conduct, or political opinions.

Individual

Referring to a single person or thing, distinct from others in a group or category.

Authority

The power or right to give orders, make decisions, and enforce obedience.