LST Corporation Entered into a New Contract with One of Its

question 60

Multiple Choice

LST Corporation entered into a new contract with one of its raw material suppliers. The new contract required the supplier to deliver raw materials with a 24-hour notice from LST. This reduces LST's material handling costs, but has increased the cost of the raw materials delivered. Which of the following variances is most likely to result?

• A) Unfavourable direct material price variance
• B) Favourable direct price variance
• C) Unfavourable variable overhead spending variance
• D) Unfavourable fixed overhead spending variance

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Definitions:

Customer Value Map

A visual tool that helps businesses analyze and display the value that customers place on their product or service compared to its competitors.

Relative

A term used to describe something in comparison or in relation to another variable, often used in analysis or assessments.

Competing Products

Products that are offered by different companies that serve the same market segment and meet the same needs or purposes as others.

Semantic Scales

A measurement scale used in research that assesses the connotative meaning of objects, concepts, or events, thus capturing the qualitative aspects of attitudes or feelings.