This objective test question contains a question type which will only appear in a computer-based exam, but this question provides valuable practice for all students whichever version of the exam they are taking.
While a drag and drop style question is impossible to fully replicate within a paper based medium, some questions of this style have been included for completeness.
A business is expanding rapidly and buying its material in a variety of countries in a variety of currencies. It has an exclusive supply delivery contract whereby the same logistics expert makes all deliveries in to its warehouses on a cost plus basis. It pays all delivery charges on a per unit basis.
Which of the following are valid explanations of an adverse material price variance measured to include delivery costs as part of the cost per kg delivered?
Drag the correct items into the box below:
Exchange rate movements
Extra discounts agreed
Increased world-wide demand for the material
Extra supply of the material becoming available from new suppliers
World oil price rises
Increases in the dividends paid by the delivery business
