The Purchasing Manager Was Able to Bring Down the Cost

question 114

Multiple Choice

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

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

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Definitions:

Estrogen

A female sex hormone; when produced during ovulation, estrogen causes a buildup of the lining of the uterus (womb) to prepare it for a possible pregnancy.

Ovary

A female reproductive organ in which ova (eggs) are produced, as well as hormones like estrogen and progesterone.

Bulbourethral Glands

Small glands located on each side of the urethra in males that produce a pre-ejaculate fluid that lubricates and neutralizes acidity in the urethra.

Seminiferous Tubules

Narrow, coiled tubules inside the testicles where spermatogenesis, the production of sperm cells, occurs.