Panther Company had a favorable flexible- budget direct- material variance. In this case it would not be possible for the direct- material price and usage variances, respectively, to be:
A) favorable and unfavorable
B) favorable and favorable
C) unfavorable and favorable
D) unfavorable and unfavorable

Question

Quizplus · Accepted Answer

A favorable flexible-budget direct-material variance means that the actual cost was less than the budgeted cost. If both the price and usage variances were unfavorable, the overall variance could not be favorable.

Panther Company Had a Favorable Flexible- Budget Direct- Material Variance