Which of the Following Is NOT Characteristic of Direct Materials

question 37

Multiple Choice

Which of the following is NOT characteristic of direct materials variances?

• A)The sum of the price and usage variances will add up to the total materials variance only if the materials purchased is equal to the materials used.
• B)The materials price variance uses the actual quantity of materials purchased rather than the actual quantity of materials used.
• C)The materials price variance always uses the actual quantity of materials used rather than the actual quantity of materials purchased.
• D)The materials usage variance uses the actual quantity of materials used.

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Definitions:

Wages Payable

The total amount of wages earned by employees that have not yet been paid by the employer.

Wages Expense

The total cost incurred by a business for paying salaries and wages to its employees during a particular period.

Finished Goods

Items that are fully manufactured but have not been sold or dispatched to the final consumer.

Work in Process

Inventory items that are in the production process but are not yet completed goods, often abbreviated as WIP.