Chapman Products has a favorable materials usage variance. Which of the following would be the most likely reason for this variance?
A) The company under budgeted the quantity of material to be used for each unit.
B) The company purchased material at a price for less than what was expected.
C) The company's employees were less trained than expected.
D) The company's machines were better maintained resulting in lower wastage of materials.

Question

Quizplus · Accepted Answer

A favorable materials usage variance means that the actual amount of materials used was less than the expected amount. This could be due to factors such as better employee training or better machine maintenance resulting in less wastage of materials, as option D suggests. Options A and C suggest that the company underestimated the amount of materials needed for production, which would result in an unfavorable variance. Option B suggests a favorable price variance, which is different from a materials usage variance.

Chapman Products Has a Favorable Materials Usage Variance