MB-330 Implement and Manage Supply Chain Processes Practice Question
Your organization uses a 'Standard cost' inventory model. When performing a purchase price variance analysis, where is the variance posted if the purchase price differs from the standard cost?
⚠ Common exam trap
Candidates often guess 'Inventory account' or 'COGS' because they are common accounting terms, forgetting that standard cost models specifically isolate price differences into designated variance accounts for analysis.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Purchase price variance account
In a standard cost environment, the system posts the difference between the purchase price and the standard cost to specific variance accounts. This is essential for controlling procurement performance. These accounts are defined in the posting profile, allowing finance departments to track where costs deviate from expectations. Understanding this posting logic is critical for accurately reporting on purchasing efficiency and supplier price performance within the Supply Chain Management module.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Inventory loss account
Why it's wrong here
Inventory loss accounts are used to record write-offs due to damage, theft, or cycle counting adjustments. They are not intended for purchase price variances, which represent the difference between expected standard costs and actual acquisition costs. Using this account would misrepresent the nature of the variance in the financial reports.
- ✓
Purchase price variance account
Why this is correct
The system is specifically configured to post purchase price variances to a designated ledger account defined in the inventory posting setup. This provides visibility into whether the cost of raw materials is higher or lower than the established standard, enabling management to monitor and analyze procurement cost performance effectively.
- ✗
Inventory expenditure, receipt account
Why it's wrong here
The inventory expenditure, receipt account is used to record the temporary accrual when goods are received but not yet invoiced. It does not handle variances between the standard cost and the invoice price. This account's purpose is strictly for the receipt process before the final financial update is completed.
- ✗
Inventory cost revaluation account
Why it's wrong here
Cost revaluation accounts are used when the cost of inventory on hand is changed manually or via standard cost updates. They are not used to record purchase price variance at the time of purchase. Using this account would incorrectly revalue current stock rather than recording the variance as an expense.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MB-330 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MB-330 exam.