An unfavourable materials price variance with a favourable materials usage variance would most likely be the result of
A)machines breaking down.
B)problems with labour efficiency.
C)purchase of high quality materials.
D)problems with labour rates.

Question

Quizplus · Accepted Answer

The unfavourable materials price variance indicates that the company paid more for materials than expected. However, the favourable materials usage variance indicates that they were able to use the materials efficiently. This could be due to the purchase of high quality materials that resulted in less waste or more output. Therefore, choice C, the purchase of high quality materials, is the best option.

An Unfavourable Materials Price Variance with a Favourable Materials Usage