Assume (1) the quantity of materials purchased equals the quantity used in production, (2) the materials spending variance is unfavorable, and (3) the materials quantity variance is favorable. Given these assumptions, which of the following statements is true?

Multiple Choice The materials price variance must be favorable.

The materials price variance could be favorable or possibly unfavorable depending on the standard quantity of material allowed for the actual level of output.

The materials price variance Must be unfavorable

The materials price variance must be equal in amount to the materials quantity variance but unfavorable instead of favorable.