Notes This preview shows page 1 - 2 out of 2 pages. 5.The purchasing manager will generally have responsibility for materials pricevariance because they have control over the price paid for goods. However,someone other than purchasing manager could be responsible for a materialsprice variance. Production supervisors are generally responsible for labor ratevariance because labor rate variances generally arise as a result of how labor isused. The production department generally has responsibility for materialsquantity variance because they see that material usage is kept in line withstandards. However, sometimes the purchasing department may be responsiblefor an unfavorable materials quantity variance.6.The materials price variance can be computed either at the time of purchase ofdirect materials or at the time when the direct materials are used. Mostcompanies compute the materials price variance when materials are purchasedrather than when they are used in production. There are two reasons for thispractice. First, delaying the computation of the price variance until the materialsare used would result in less timely variance reports. Second, computing theprice variance when the materials are purchased allows materials to be carried inthe inventory accounts at their standard cost, which greatly simplifiesbookkeeping. Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 2 pages? Upload your study docs or become a Course Hero member to access this document Homework Help This preview shows page 7 - 10 out of 130 pages. 16. Which department should usually be held responsible for an unfavorable materials pricevariance?A.Production.B.Materials Handling.C.Engineering.D.Purchasing.The purchasing department should ordinarily be held responsible for an unfavorable materialsprice variance because that department ordinarily has most control over the price. AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: KnowledgeLearning Objective: 10-01 Compute the direct materials quantity and price variances and explain their significanceLevel: Easy17. Tower Company planned to produce 3,000 units of its single product, Titactium, duringNovember. The standards for one unit of Titactium specify six pounds of materials at $0.30per pound. Actual production in November was 3,100 units of Titactium. There was anunfavorable materials price variance of $380 and a favorable materials quantity variance of$120. Based on these variances, one could conclude that: Get answer to your question and much more AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ComprehensionLearning Objective: 10-01 Compute the direct materials quantity and price variances and explain their significanceLevel: MediumSource: CMA, adapted Chapter 10 - Standard Costs and Variances18. If the labor efficiency variance is unfavorable, then Get answer to your question and much more 10-71AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ComprehensionLearning Objective: 10-02 Compute the direct labor efficiency and rate variances and explain their significanceLevel: Medium AACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: KnowledgeLearning Objective: 10-02 Compute the direct labor efficiency and rate variances and explain their significanceLevel: Easy19. A labor efficiency variance resulting from the use of poor quality materials should becharged to: Get answer to your question and much more Chapter 10 - Standard Costs and Variances10-72 Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 130 pages? Upload your study docs or become a Course Hero member to access this document Tags Variance, Trigraph, Direct material price variance, AACSB What department is usually responsible for an unfavorable material quantity variance?Understanding the Material Quantity Variance
The material quantity is usually set by the engineering department, and is based on an expected amount of material that should theoretically be used in the production process, along with an allowance for a reasonable amount of scrap.
Who is most likely to be held responsible for a material quantity variance?4. In general, the purchasing agent is responsible for the material price variance. 5.
Who usually takes the responsibility for the unfavorable materials price variances?Reason: The production manager is generally responsible for the quantity variance and the purchasing manager is generally responsible for the price variance. A planning budget called for 500 units to be produced and total direct labor cost of $7,500.
Which department is often responsible for a direct materials variance based on quantity?This variance is the responsibility of the purchasing department.
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Which department should usually be held responsible for an unfavorable direct material quantity variance?
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