A favorable materials price variance may be caused by:
A)A reduction in suppliers causing an unexpected increase in price.
B)Higher quality materials purchased at a higher cost resulting in fewer materials being used than expected.
C)Highly skilled employees using fewer materials than expected.
D)Low quality materials purchased at a lower cost than expected.
E)None of the answer choices is correct.

Question

Quizplus · Accepted Answer

A favorable materials price variance is a situation where the actual cost of materials purchased is lower than the expected cost. Option D states that low-quality materials were purchased at a lower cost than expected, which is a plausible reason for a favorable materials price variance.

A Favorable Materials Price Variance May Be Caused By