Which of the following can be a reason for a favorable price variance for direct materials?
A) a decrease in the price of materials due to an oversupply of materials
B) an unexpected increase in the price of materials
C) less amount of material used during production than planned for actual output
D) workers taking less time to produce the products

Question

Quizplus · Accepted Answer

A favorable price variance for direct materials occurs when the actual cost of materials is less than what was expected or budgeted. This can happen due to a decrease in the price of materials, such as from an oversupply, which makes materials cheaper to purchase.

Which of the Following Can Be a Reason for a Favorable