COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An unfavourable materials quantity variance may be the result of
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a greater than anticipated waste in the manufacturing process
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an increase in the cost per unit of raw materials
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a decrease in the cost per unit of raw materials
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a lower than anticipated waste in the manufacturing process
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Explanation:
Detailed explanation-1: -An unfavorable materials quantity variance arises when the actual direct materials used for the production are greater than the standard materials that must be used. It is computed as the difference in the material quantity multiplied by the standard price.
Detailed explanation-2: -A material quantity difference that is not in the company’s favor means that the company has used more materials than planned. This can happen for several reasons, such as inefficiency in the production process, unexpected customer demand, or mistakes in the planning materials.
Detailed explanation-3: -The correct answer is d) increased material cost per unit.
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