A company's production department was experiencing a high defect rate on the assembly line,which was slowing down production and causing a higher waste of valuable direct materials.The production manager decided to purchase a higher grade of materials that would be more reliable.This would produce a(n)________.
A) favorable direct materials cost variance
B) unfavorable direct labor cost variance
C) unfavorable direct labor efficiency variance
D) favorable direct materials efficiency variance

Question

Quizplus · Accepted Answer

By purchasing higher grade materials that are more reliable, the production manager is likely to reduce the amount of direct materials that are wasted due to defects. This would result in a favorable direct materials efficiency variance, as fewer materials are being used to produce the same level of output. The other options do not necessarily relate to the decision to purchase higher grade materials.

A Company's Production Department Was Experiencing a High Defect Rate