Answer (D) is correct . A favorable materials price variance is the result of paying less than the standard price for materials. An unfavorable materials usage variance is the result of using an excessive quantity of materials. If a purchasing manager were to buy substandard materials to achieve a favorable price variance, an unfavorable quantity variance could result from using an excessive amount of poor quality materials.
Answer (A) is incorrect because Machine efficiency problems do not explain the price variance.
Answer (B) is incorrect because A change in product mix does not explain the price variance.
Answer (C) is incorrect because Materials of higher-than-standard quality are more likely to cause an unfavorable price variance and a favorable quantity variance.
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