A Favorable Direct Materials Price Variance Might Lead to an Unfavorable

question 85

True/False

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

---

Definitions:

Units Sold

The quantity of product units that have been sold during a specific period.

Break-even Point

The point at which total costs and total revenues are equal, meaning the business is neither making a profit nor suffering a loss.

Variable Expenses

Costs that change in proportion to the level of activity or volume of production in a business.

Sales

The total revenue generated from goods or services sold by a company during a specific period.