The MOST likely explanation of the above variances for Material A is that

ACCOUNTING

Multiple Choice

Ruben’s Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance.

Flexible ------------Variances-------------

Budget Price Efficiency

Material A $20,000 $1,000F $3,000U

Material B 30,000 500U 1,500F

Direct manufacturing labor 40,000 500U 2,500F


The MOST likely explanation of the above variances for Material A is that

a. a lower price than expected was paid for Material A

b. higher-quality raw materials were used than were planned

d. the company used a higher-priced supplier

d. Material A used during September was $2,000 less than expected


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