A contract with a new supplier may cause a favourable or unfavourable materials price variance.

Question

Quizplus · Accepted Answer

A materials price variance occurs when the actual price paid for materials differs from the expected or standard price. A contract with a new supplier can lead to paying more or less than the standard price, causing either a favourable variance (if the actual price is lower) or an unfavourable variance (if the actual price is higher).

A Contract with a New Supplier May Cause a Favourable