The purchasing agent of an organization acquired some raw materials at a bargain price, even though she knew that their quality was lower than that of the materials customarily used.This action resulted in a favorable raw materials purchase price variance that might very well have been more than offset by:
A)an unfavorable raw materials usage variance.
B)a favorable direct labor efficiency variance.
C)an unfavorable variable overhead spending variance.
D)an unfavorable direct labor rate variance.

Question

Quizplus · Accepted Answer

The lower quality materials may lead to more waste or defects, increasing the amount of raw materials used, resulting in an unfavorable raw materials usage variance.

The Purchasing Agent of an Organization Acquired Some Raw Materials