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:

Auscultating

The act of listening to the internal sounds of the body, typically using a stethoscope, as part of a medical examination.

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Calibration

The process of adjusting and validating the accuracy of a measurement instrument by comparing it with a standard.

Demonstrate

To clearly show the existence or truth of something by providing evidence or proof.