A Favorable Materials Price Variance Coupled with an Unfavorable Material

question 58

Multiple Choice

A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:

• A) labor efficiency problems.
• B) machine efficiency problems.
• C) the purchase and use of higher than standard quality material.
• D) the purchase and use of lower than standard quality material.

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Definitions:

Business Cycle

Periodic fluctuations in economic activity, such as growth and recession.

Recovery

A period of economic improvement following a recession or downturn.

Trough

The lowest point in an economic cycle, marking the transition from recession to recovery.

Peak

The highest point reached by a commodity or market price before a decline.