Please confirm the correct answer among the bold-fond choices. Assume that Cabanarama develops the standards for materials use, materials price, labor use, and labor wages. Who will be assigned responsibility for each and for any resulting variances? Why? Once the standards are set, actual results can be compared with the standards and variances can be calculated. Variances are indicators of potential problems. The underlying causes of the variances is reviewed to determine if corrective action is required . The most likely variances include the following: Note: Select the individual that would be assigned to each of the variances listed below and what they would be expected to know. Materials Purchase Price Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who can explain why materials prices differed from the standards. Materials Usage Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who knows actual materials used in production and why the amount of materials used differed from the standards. Labor Rate Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who knows why wage rates differ from the standards . Labor Usage Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager). It is this individual who knows why actual hours differ from the time standards

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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62 Please confirm the correct answer among the bold-fond choices.

Assume that Cabanarama develops the standards for materials use, materials price, labor use, and labor wages. Who will be assigned responsibility for each and for any resulting variances? Why?

Once the standards are set, actual results can be compared with the standards and variances can be calculated. Variances are indicators of potential problems. The underlying causes of the variances is reviewed to determine if corrective action is required .

The most likely variances include the following:

Note: Select the individual that would be assigned to each of the variances listed below and what they would be expected to know.

Materials Purchase Price Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who can explain why materials prices differed from the standards.

Materials Usage Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who knows actual materials used in production and why the amount of materials used differed from the standards.

Labor Rate Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager) . It is this individual who knows why wage rates differ from the standards .

Labor Usage Variance: Responsibility for this variance lies with the (Humarn resource Manager OR Production department manager OR Plant Manager OR Material Purchasing Manager). It is this individual who knows why actual hours differ from the time standards .

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