Answer
Three causes of a favorable direct materials price variance are:
1. Skillful Negotiations: Skillful negotiation by the purchasing manager resulting in lower prices than budgeted.
2. Supplier Switch: Switching to a lower-priced supplier.
3. Quantity Discounts: Ordering larger quantities than budgeted, obtaining discounts.
Work Step by Step
Three causes of a favorable direct materials price variance are:
1. Skillful Negotiations: Skillful negotiation by the purchasing manager resulting in lower prices than budgeted.
2. Supplier Switch: Switching to a lower-priced supplier.
3. Quantity Discounts: Ordering larger quantities than budgeted, obtaining discounts.
