Circumstances can occur that result in favorable direct materials price variances and unfavorable direct materials quantity variances.

Question

Quizplus · Accepted Answer

This is because favorable price variances imply that the actual price paid for the materials was lower than the standard price, which is beneficial. However, unfavorable quantity variances imply that more materials were used than planned, resulting in higher costs. Therefore, it is possible for these two variances to occur simultaneously.

Circumstances Can Occur That Result in Favorable Direct Materials Price