What Does a Favorable Direct Materials Cost Variance Indicate

question 66

Multiple Choice

What does a favorable direct materials cost variance indicate?

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

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Definitions:

Organizational Goals

The objectives or targets that an organization aims to achieve, which guide its strategic planning and operations.

Strategic Framework

An overarching plan or structure that outlines an organization's strategy, including its goals, principles, and approaches to achieving its objectives.

Structural Variables

Factors that define the organizational structure, such as departmentalization, chain of command, span of control, and centralization or decentralization.

Work Division

The process of dividing tasks, responsibilities, and workloads among individuals or teams to improve efficiency and productivity.