Temecula Company has calculated its direct materials price variance to be ($1,000) favorable and its direct materials

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Temecula Company has calculated its direct materials price variance to be \($1,000\) favorable and its direct materials quantity variance to be \($3,000\) unfavorable. Which of the following could explain both of these variances?

a. The production manager has recently hired more skilled laborers.

b. The purchases manager bought less expensive raw materials but they were of lower quality.

c. A machine in the factory malfunctioned resulting in considerable wasted raw materials.

d. The purchases manager bought higher quality materials.

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Managerial Accounting

ISBN: 9780078110771

1st Edition

Authors: Stacey WhitecottonRobert LibbyRobert Libby, Patricia LibbyRobert Libby, Fred Phillips

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