1. Which of the following explain why accountants separate materials variances into a purchase price variance and a usage variance?

a. All of these choices are correct.

b. Materials might not be purchased and used in the same period.

c. Different individuals may be responsible for each variance.

d. These two variances are likely to be more informative to top management than one overall materials variance.

2. Determine the materials usage variance and materials price variance from the following data: Materials purchased 30,000 units Price per unit purchased $3.00 Standard price per unit $3.10 Materials used 25,000 units Standard quantity allowed 22,000 units

a. $9,300 favorable usage variance, $3,000 unfavorable price variance

b. $9,300 unfavorable usage variance, $3,000 favorable price variance

c. $9,000 unfavorable usage variance, $2,200 favorable price variance

d. $9,000 favorable usage variance, $2,200 unfavorable price variance

3.To which account would an unfavorable materials usage or labor efficiency variance caused by carelessness or inefficiency be closed?

a. Finished Goods Inventory

b. Work in Process Inventory

c. Materials Inventory

d. Income Summary