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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Standard costs should generally be based on the actual costs of prior periods. The standard direct labour rate should not include fringe benefits. From a standpoint of cost control, the most effective time to recognize material price variances is when the materials are placed into production. The material quantity variance is computed based on the quantity of all materials purchased during the period. Purchase of poor quality materials will generally result in a favourable materials price variance and an unfavourable labour rate variance. A favourable labour efficiency variance would result in a credit balance in the labour efficiency variance account. Management by exception means that a manager's attention is directed toward those parts of the organization where variances between actual and budget are significant. The production manager is usually held responsible for the labour efficiency variance. Which department is usually held responsible for an unfavorable materials quantity variance?In general, the purchasing agent is responsible for the material price variance. 5. When more hours of labor time are necessary to complete a job than the standard allows, the labor rate variance is unfavorable.
Which department is usually held responsible for an unfavorable?The purchasing department should ordinarily be held responsible for an unfavorable materials price variance because that department ordinarily has most control over the price.
Which department should usually be held responsible for an unfavorable materials price variance production materials handling engineering purchasing?10-8 The materials price variance is usually the responsibility of the purchasing manager.
Who is responsible for a materials price variance?Answer and Explanation:. |