13. The purchasing agent of the Clampett Company ordered materials of lower qual

Question

13. The purchasing agent of the Clampett Company ordered materials of lower quality in an effort to economize on price and in response to the demands of the mistake in production scheduling. The materials were shipped by airfreight at a rate that ordinarily charged for shipment by truck, resulting in an unfavo variance, The lower quality material proved to be unsuitable on the production line and resulted in excessive waste. In this situation, who should be held responsible for the materials price an quantity variances? production manager due to a rable materials price Materials Quantity Variance Purchasing Agent Production Manager Purchasing Agent Production Manager Materials Price Variance Purchasing Agent A) B) Production Manager C) Production Manager D) Purchasing Agent A. Option A B. Option B C. OptionC D. Option D 14. Todco planned to produce 3,000 units of its single product, Teragram, during November. The standard specifications for one unit of Teragram include six pounds of material at S0.30 per A ovenber was 3.100 units of Teragram. The accountant computed a favorable materials purchase price variance of $380 and an unfavorable materials quantity variance of $120. Based on these variances, one could conclude that A. more materials were purchased than were used. ore materials were used than were purchased. C, the actual cost of materials was less than the standard cost. the actual usage of materials was less than the standard allowed. 15. The materials quantity variance should be computed: A. when materials are purchased. B. based upon the amount of materials used in production C. based upon the difference between the actual and standard prices per unit times the actual quantity used. D. only when there is a difference between standard and actual cost per unit for the materials

Explanation / Answer

13)correct option is"D'

Price variance is due to purchase of cheaper quality material which is a responsibility of purchasing agent

Quantity variance is due to wrong scheduling of production manager which requires the purchase of lower quality material

14)correct optin is C"

15)correct option is "B

When there is a difference in material used in production and material that should be actually used , material quantity variance is computed.

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