Chapman Products has a favourable materials usage variance.Which of the following would be the most likely reason for this variance?
A) The company overbudgeted 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 less waste of materials.

Question

Quizplus · Accepted Answer

A favourable materials usage variance occurs when actual usage is less than expected. One possible reason for this could be better maintenance of machinery, resulting in less waste of materials. Option A relates to a favourable materials quantity variance, not usage variance. Option B relates to a favourable materials price variance. Option C is not a relevant factor for a materials usage variance.

Chapman Products Has a Favourable Materials Usage Variance