What Is the Result When the Quantity of Materials Used

question 135

Multiple Choice

What is the result when the quantity of materials used is less than the standard quantity?

• A) A favorable materials usage variance
• B) A favorable materials price variance
• C) An unfavorable materials usage variance
• D) An unfavorable materials price variance

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Definitions:

Direct Labor

Costs attributed to the work done by employees who are directly involved in the production of goods or services.

Conversion Cost

The combined expenses of direct labor and manufacturing overhead, representing the costs to convert raw materials into finished goods.

Product Cost

The total cost associated with manufacturing a product, including direct materials, direct labor, and manufacturing overhead.

Direct Materials

The raw materials that can be directly traced to the manufacturing process of a product.