If the total direct materials variance (actual cost of direct materials used compared with the standard cost of the standard amount of direct materials required) for a given operation is favorable, why must this variance be further evaluated as to price and usage? lo4 

a There is no need to further evaluate the total direct materials variance if it is favorable.

b Generally accepted accounting principles require that all variances be analyzed in three stages.

c All variances must appear in the annual report to equity owners for proper disclosure.

d_ This will allow management to separately evaluate the efficiency of the purchasing and production functions.