Asked by Linda MyPhuong on Jun 04, 2024
Verified
A favorable direct materials price variance might lead to an unfavorable direct materials quantity variance because the company purchased inferior materials.
Direct Materials Price Variance
The difference between the actual cost of direct materials purchased and the expected (or standard) cost, impacting the overall cost of goods sold.
Direct Materials Quantity Variance
The difference between the actual quantity of materials used in production and the standard amount expected to be used, multiplied by the standard cost of those materials.
Inferior Materials
Materials of lower quality than standard, which may affect the quality of finished goods and potentially reduce manufacturing costs.
- Identify the contrast between beneficial and detrimental variances.
Verified Answer
Learning Objectives
- Identify the contrast between beneficial and detrimental variances.
Related questions
Within the Same Flexible Budget Performance Report,it Is Impossible to ...
Kaina Clinic Uses Client-Visits as Its Measure of Activity ...
Subtracting Actual Revenues from Planned Revenues Provides the Revenue Price ...
A Favorable Cost Variance Occurs When the Actual Cost Is ...
Although Favorable Fixed Factory Overhead Volume Variances Are Usually Good ...