Section A

GlobalTex, a cross-border textile manufacturer, reported a significant Adverse Material Usage Variance for the month.

Which of the following are plausible causes for this adverse variance? (Select ALL that apply)

An adverse material usage variance means that more material was used than the standard allowance for the actual production level. This is typically caused by high scrap rates, wastage, or theft. Inferior quality materials (which break or fail quality checks) and poor machine maintenance (which damages materials) are classic causes of adverse usage variances. Price changes affect the price variance, not usage.