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4) The procurement manager was able to bring down the cost of direct materials by purchasing materials of a slightly lower grade quality than the
4) The procurement manager was able to bring down the cost of direct materials by purchasing materials of a slightly lower grade quality than the company had used previously. The lower grade of materials, however, meant a higher defect rate on the assembly line, and higher wastage of materials during production, which in turn lowered operating income. This situation would have led to a(n): a. favorable direct materials cost variance
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