A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following?
A)Less expensive, inferior materials requiring less than the standard amount were used in production.
B)Less expensive, inferior materials requiring more than the standard amount were used in production.
C)More expensive, superior materials requiring more than the standard amount were used in production.
D)More expensive, superior materials requiring less than the standard amount were used in production.

Question

Quizplus · Accepted Answer

A favorable direct materials price variance indicates that the actual cost of materials was less than the expected cost, suggesting that less expensive materials were purchased. An unfavorable direct materials quantity variance indicates that more materials were used than expected, which could be due to the inferior quality of the cheaper materials requiring more to be used to meet production needs.

A Favorable Direct Materials Price Variance and an Unfavorable Direct