A Favorable Direct Materials Price Variance Might Lead to an Unfavorable

question 127

True/False

A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased cheap materials.

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Definitions:

Net Income

The conclusive income of a corporation post all deductions for costs and taxes from its aggregate revenue.

Dividends

A share of profits paid out to shareholders by a corporation, usually in cash or in the form of more shares.

Trading Securities

These are securities that a company holds primarily with the intention of trading them in the short term to profit from price fluctuations.

Fair Value

An estimate of the price at which an asset or liability could be bought or sold in an open market between willing parties.