A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:
A) labor efficiency problems.
B) machine efficiency problems.
C) the purchase and use of higher than standard quality material.
D) the purchase and use of lower than standard quality material.

Question

Quizplus · Accepted Answer

A favorable materials price variance indicates that materials were purchased at a lower cost than the standard price. However, an unfavorable material usage variance indicates that more materials were used than the standard quantity. This could occur if lower quality materials were used, which may result in wastage or inefficiencies in the production process. Therefore, the purchase and use of lower than standard quality material would most likely result in this combination of variances.

A Favorable Materials Price Variance Coupled with an Unfavorable Material