Byron Products Has a Favorable Materials Price Variance

question 7

Multiple Choice

Byron Products has a favorable materials price variance. Which of the following would be the least likely reason for this variance?

• A) The company over budgeted the standard price for materials.
• B) The company took advantage of quantity discounts from its suppliers.
• C) The company's employees were more efficient with the use of their production time.
• D) The company purchased a substandard material at a cheaper price.

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Definitions:

Salary

A form of payment from an employer to an employee, which may be specified in an employment contract.

Loss Averse

The behavioral tendency of individuals to prefer avoiding losses over acquiring equivalent gains, highlighting the emotional impact of loss.

Prospect Theory

A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are uncertain.

Rational Consumers

Individuals who make decisions to maximize their utility or satisfaction based on the information available and their own preferences.