A company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted?
A)Direct materials quantity variance
B)Direct materials price variance
C)Direct labor rate variance
D)Direct labor efficiency variance

Question

Quizplus · Accepted Answer

When the price of sugar doubles, it directly impacts the cost of the raw material used in production. Therefore, the variance that is directly impacted is the direct materials price variance.

A Company Uses Sugar in Producing Its Product