Justin Company recently purchased materials from a new supplier at a very attractive price. The materials were found to be of poor quality, and the company's laborers struggled significantly as they shaped the materials into finished product. In a desperation move to make up for some of the time lost, the manufacturing supervisor brought in more-senior employees from another part of the plant. Which of the following variances would have a high probability of arising from this situation?
A) Material price variance, favorable.
B) Material quantity variance, unfavorable.
C) Labor rate variance, unfavorable.
D) Labor efficiency variance, unfavorable.
E) All of the other answers are correct.

Question

Quizplus · Accepted Answer

The situation described would likely lead to a favorable material price variance due to the attractive price, an unfavorable material quantity variance due to poor quality, an unfavorable labor rate variance due to using more-senior employees, and an unfavorable labor efficiency variance due to the struggle in shaping the materials.

Justin Company Recently Purchased Materials from a New Supplier at a Very