List three causes of a favourable materials rate variance.

A. 1. Purchases were made in smaller lot sizes than budgeted. 2. Materials rates increased unexpectedly due to industry shortage. 3. Budgeted purchase prices were set without careful market analysis.

B. 1. Materials rates decreased unexpectedly due to industry oversupply. 2. Purchases were made in larger lot sizes than budgeted. 3. The purchasing officer made skillful negotiations.

C. 1. The purchasing manager bought in smaller lot sizes than budgeted, thus not obtaining the purchase discounts that were factored in the budget. 2. The purchasing officer made skillful negotiations. 3. Materials rates increased unexpectedly due to industry shortage.

D. None of the above are causes of a favourable materials rate variance.