Question

A company has an unfavorable spending (flexible budget) variance for direct materials. A possible explanation of...

A company has an unfavorable spending (flexible budget) variance for direct materials. A possible explanation of this is:

A. The company made more units than they had budgeted

B. The company used less material per product than they had budgeted

C. The company paid more per pound of material than they had budgeted

D. None of the above answers in correct

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Homework Answers

Answer #1

Your required answer is option C i.e. The company paid more per pound of material than they had budgeted

Explanation:

Unfavourable variance for direct material occurs when the actual amount paid for material is higher than budgeted. and therefore it interpret that the company paid more per pound of material than they had budgeted.

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