The use of high-quality raw materials is likely to result in a favourable efficiency variance and an unfavourable price variance.

Question

Quizplus · Accepted Answer

This statement is true because using high-quality raw materials is likely to lead to better output, lower wastage or defects, and savings in labour costs, resulting in a favourable efficiency variance. However, the cost of high-quality raw materials is usually higher, leading to an unfavourable price variance.

The Use of High-Quality Raw Materials Is Likely to Result