Chapter 7, Problem 7.16MCQ

Metal Shelf Company’s standard cost for raw materials is $4.00 per pound and it is expected that each metal shelf uses two pounds of material. During October Year 2, 25,000 pounds of materials are purchased from a new supplier for $97,000 and 13,000 shelves are produced using 27,000 pounds of materials. Which statement is a possible explanation concerning the direct materials variances?

1. a. The production department had to use more materials since the quality of the materials was inferior.
2. b. The purchasing manager paid more than expected for materials.
3. c. Production workers were more efficient than anticipated.
4. d. The overall materials variance is positive; no further analysis is necessary.