If the Actual Quantity of Direct Materials Used Equals the Budgeted

question 37

Multiple Choice

If the actual quantity of direct materials used equals the budgeted quantity of direct materials that should have been used,any difference between the budgeted total cost and the actual total cost of direct materials used must be due to a:

• A)Materials quantity variance
• B)Materials efficiency variance
• C)Overhead variance
• D)Materials price variance

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Definitions:

Prior-Period Adjustment

Corrections of errors made in previously published financial statements, not considered ordinary adjustments.

Net Income

The net income a company earns following the subtraction of all expenses and taxes from its total revenue.

Accounting Methods

Accounting methods are the specific principles and procedures implemented by a business or organization to prepare its financial statements.

Rigid Accounting Rules

Accounting practices that are strictly defined with little to no room for interpretation or flexibility in their application.