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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Responsibility for the materials price variance typically belongs to

  1. a. production.
  2. b. purchasing.
  3. c. marketing.
  4. d. personnel.
  5. e. the chief executive officer (CEO).

To determine

Identify the department which is responsible for material price variance.

Explanation

Variance:

The amount obtained when actual cost is deducted from budgeted cost is known as variance. Variance is calculated to find whether the cost is over applied or under applied.

b.

The responsibility of materials price variance belongs typically to the department which purchases materials. Purchasing department is concerned with the purchase of materials. Therefore, option b is the correct answer.

a.

Production department is concerned with transformation of raw materials into value added product or services...

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