A favorable direct materials price variance indicates which of the following?
A)The actual cost of materials purchased was greater than the standard cost of materials purchased.
B)The standard cost of materials purchased was less than the actual cost of materials purchased.
C)The Actual Quantity (AQ)of materials used was less than the standard quantity of materials used for actual production.
D)The standard cost of materials purchased was greater than the actual cost of materials purchased.

Question

Quizplus · Accepted Answer

A favorable direct materials price variance occurs when the actual cost of materials is less than the standard cost anticipated for those materials. This means the company paid less for its materials than it had planned, which is a positive outcome.

A Favorable Direct Materials Price Variance Indicates Which of the Following