Question

Which one of the following statements is true? Select one: a. If the materials price variance is unfavorable, then the materials quantity variance must also be unfavorable. b. If the materials price variance is unfavorable, then the materials quantity variance must be favorable. c. Price and quantity variances move in the same direction. If one is favorable, the others will be as well. d. There is no correlation of favorable or unfavorable for price and quantity variances. Check

Answer 1

Answer:

C

Explanation:

Price and quantity variances move in the same direction. If one is favorable, the others will be as well. This is because there is a direct relationship between price and quantity. If one is favourable the other is likely to be favourable and if one is adverse the other is likely to be adverse.