Question
For production of laser discs, a company plans to switch suppliers. The new supplier offers discs at a higher price than the standard price, but
For production of laser discs, a company plans to switch suppliers. The new supplier offers discs at a higher price than the standard price, but guarantees higher quality, meaning that the firm will use less discs per unit of product than was originally budgeted. If the firm chose to buy from this supplier, what would it observe for the coming month? An unfavorable direct materials price variance and an unfavorable direct materials quantity variance An unfavorable direct materials price variance and a favorable direct materials quantity variance A favorable direct materials price variance and a favorable direct materials quantity variance A favorable direct materials price variance and an unfavorable direct materials quantity variance
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