[amp_mcq option1=”Price increase in raw materials” option2=”Price decrease in raw materials” option3=”Less than anticipated normal wastage in the manufacturing process” option4=”More than anticipated normal wastage in the manufacturing process” correct=”option1″]<\/p>\n
The correct answer is: A. Price increase in raw materials.<\/p>\n
A material price variance is the difference between the actual price paid for materials and the standard price. It is calculated by multiplying the actual quantity of materials used by the difference between the actual price and the standard price.<\/p>\n
A favorable material price variance occurs when the actual price paid for materials is less than the standard price. This can happen for a number of reasons, such as a decrease in the market price of raw materials, a decrease in the quantity of materials used, or an increase in the standard price.<\/p>\n
An unfavorable material price variance occurs when the actual price paid for materials is more than the standard price. This can happen for a number of reasons, such as an increase in the market price of raw materials, an increase in the quantity of materials used, or a decrease in the standard price.<\/p>\n
In the case of the question, an unfavorable material price variance occurs because of a price increase in raw materials. This is because the actual price paid for materials is more than the standard price. The actual price paid for materials is more than the standard price because the market price of raw materials has increased.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”Price increase in raw materials” option2=”Price decrease in raw materials” option3=”Less than anticipated normal wastage in the manufacturing process” option4=”More than anticipated normal wastage in the manufacturing process” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-57911","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n