Question

Which of the following is the most likely explanation for an unfavorable direct materials quantity variance?...

  1. Which of the following is the most likely explanation for an unfavorable direct materials quantity variance?

    a.

    The new purchasing agent was not as effective in negotiating low prices.
    b.

    They used higher quality direct materials, which reduced waste (scrap).
    c.

    The government levied new tariffs on the materials purchased.
    d.

    Lack of training meant that employees made more mistakes than expected.
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Answer #1

Solution

An unfavorable direct materials quantity variance indicates that the direct materials have been excessively used. The excess usage of direct materials could be due to lack of proper training and supervision of the employees, faulty machines, material wastage due to interruptions in the power supply etc.

Therefore the most likely explanation for an unfavorable direct materials quantity variance would be option d, lack of training of employees due to which mistakes more than expected were made. This could have resulted in wastage of materials and usage of extra or excess direct materials.

Answer: Option d

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