Miller Company has an unfavourable materials price variance. Which of the following would be the least likely reason for this variance? A.The company did not take advantage of purchase discounts. B. The company underbudgeted the standard price for materials. C. The company purchased a higher quality material than was budgeted. D. The company used more material than was budgeted for in each unit.
Miller Company has an unfavourable materials price variance. Which of the following would be the least likely reason for this variance? A.The company did not take advantage of purchase discounts. B. The company underbudgeted the standard price for materials. C. The company purchased a higher quality material than was budgeted. D. The company used more material than was budgeted for in each unit.
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 22MC: Which of the following is a possible cause of an unfavorable material price variance? A. purchasing...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Miller Company has an unfavourable materials price variance. Which of the following would be the least likely reason for this variance?
A.The company did not take advantage of purchase discounts.
B. The company underbudgeted the standard price for materials.
C. The company purchased a higher quality material than was budgeted.
D. The company used more material than was budgeted for in each unit.
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