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Alongside labor efficiency, a favorable material price variance could also cause an unfavorable:
ALabor rate variance paid
BOverhead spending rate
CMaterial quantity variance
DMaterial price variance
Answer & Solution
Correct answer: C. Material quantity variance
1. Cheap materials can go wrong in more than one way.
2. A favorable material price variance could cause an unfavorable labor efficiency variance.
3. It could also cause an unfavorable material quantity variance.
4. Poor quality material is wasted as well as slow to work.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 8 'Standard Costs and Variances'_
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