Main TopicsWho is responsible for material price variance?
Table of Contents
- Who is responsible for material price variance?
- Which department would most likely be held responsible for an unfavorable materials price variance?
- Who should be usually held responsible for labor variances?
- Which department is responsible for direct materials price variance?
- What are the reasons for material cost variance?
- What are the reasons for material price variance?
- What can cause an unfavorable material price variance?
- How is labor cost variance calculated?
- What are some possible reasons for a labor rate variance?
- What are the two direct materials variances what factors can affect each variance and who is generally responsible for the variance?
- What causes an unfavorable price variance in management accounting?
- Who is usually held responsible for labor price variances?
- Who is responsible for materials price and quantity variances?
- What does an unfavorable materials quantity variance mean?
Who is responsible for material price variance?
The materials price variance is usually the responsibility of the purchasing manager. The materials quantity and labor efficiency variances are usually the responsibility of production managers and supervisors.
Which department would most likely be held responsible for an unfavorable materials price variance?
price variance. Which department should usually be held responsible for an unfavorable materials price variance? Purchasing.
Who should be usually held responsible for labor variances?
The unfavorable labor efficiency variance indicates that direct labor workers were unable to manufacture the 600 beams in the standard time allowed. Once again, the production manager is responsible for worker productivity and usually is held accountable for the labor variance.
Which department is responsible for direct materials price variance?
Generally, the purchasing department of the company is responsible for direct materials price variance since it has control over the acquisition of materials, including the selection of suppliers.
What are the reasons for material cost variance?
Material Price Variance is the difference between the standard price and the actual price for the actual quantity of materials used for production. The cause for material price variance can be many including changes in prices, poor purchasing procedures, deficiencies in price negotiation, etc.
What are the reasons for material price variance?
Causes of the Materials Price Variance
- Rush deliveries.
- Market-driven pricing changes, such as changes in the prices of commodities.
- Bargaining power changes by suppliers, who may be able to impose higher prices than expected.
What can cause an unfavorable material price variance?
If the actual price paid for materials is more than the standard price, an unfavorable materials price variance occurs. On the other hand, if the actual price paid for the materials is less than the standard price, a favorable materials price variance occurs.
How is labor cost variance calculated?
The labor rate variance is found by computing the difference between actual hours multiplied by the actual rate and the actual hours multiplied by the standard rate.
What are some possible reasons for a labor rate variance?
Causes of a Labor Rate Variance
- Incorrect standards. The labor standard may not reflect recent changes in the rates paid to employees. ...
- Pay premiums. The actual amounts paid may include extra payments for shift differentials or overtime. ...
- Staffing variances. ...
- Component tradeoffs. ...
- Benefits changes.
What are the two direct materials variances what factors can affect each variance and who is generally responsible for the variance?
The two direct materials variances are the materials price variance and the materials quantity variance. The purchasing department would be responsible for the price variance while the production department would be responsible for the quantity variance.
What causes an unfavorable price variance in management accounting?
An unfavorable materials price variance could have resulted from actions taken by the purchasing agent. An unfavorable materials usage variance could have resulted from actions taken by the production supervisor. An unfavorable labor usage variance could have resulted from actions taken by the personnel department.
Who is usually held responsible for labor price variances?
Purchasing agent Which manager is usually held responsible for labor price variances? Production supervisor Standards that do not allow for normal down time, waste of materials, or machine breakdowns are known as:
Who is responsible for materials price and quantity variances?
In this situation, who should be held responsible for the materials price and quantity variances? Materials Price Variance: Production Manager Materials Quantity Variance: Purchasing Agent If the labor efficiency variance is unfavorable, then actual hours exceeded standard hours allowed for the actual output
What does an unfavorable materials quantity variance mean?
An unfavorable materials quantity variance indicates that: actual usage of material exceeds the standard material allowed for output. The materials price variance should be computed: when materials are purchased. A favorable materials price variance coupled with an unfavorable material usage variance would MOST likely result from:
