Miller Company has an unfavorable materials price variance. Which of the following would be the least likely reason for this variance?
A) The company purchased a higher quality material than was budgeted.
B) The company could not take advantage of quantity discounts.
C) The company used more material than was budgeted for in each unit.
D) The company under budgeted the standard price for materials.

Question

Quizplus · Accepted Answer

An unfavorable materials price variance occurs when the actual cost of materials is higher than the expected cost. This variance is specifically related to the price paid per unit of material, not the quantity used. Option C, which mentions the company using more material than budgeted, relates to a materials quantity variance, not a materials price variance, making it the least likely reason for an unfavorable materials price variance.

Miller Company Has an Unfavorable Materials Price Variance