A materials purchasing manager recently generated a favorable materials price variance by taking advantage of a "deal" on a batch of substandard quality raw material in "as is" condition. Much of the material was found to be unusable. The manager's behavior likely resulted in:
A) An unfavorable material usage variance.
B) A favorable material usage variance.
C) An unfavorable labor rate variance.
D) A favorable labor rate variance.

Question

Quizplus · Accepted Answer

Purchasing substandard quality raw material often leads to more waste or the need for additional material to meet production requirements, which in turn causes an unfavorable material usage variance.

A Materials Purchasing Manager Recently Generated a Favorable Materials Price