The direct materials mix variance will be favourable when
A)the flexible-budget contribution margin is greater than the actual contribution margin.
B)the actual direct materials input mix is less expensive than the budgeted direct materials input mix.
C)the actual quantity of total inputs used is greater than the flexible budget for total inputs.
D)actual unit sales are less than budgeted unit sales.
E)the input-efficiency variance is favourable.

Question

Quizplus · Accepted Answer

The direct materials mix variance measures the difference in cost between the actual mix of direct materials used and the budgeted mix of direct materials. If the actual mix is less expensive than the budgeted mix, the variance will be favourable. Therefore, the correct choice is B.

The Direct Materials Mix Variance Will Be Favourable When