Question

The material price variance (computed at point of purchase) is

a. the difference between the actual cost of material purchased and the standard cost of material purchased
b. the difference between the actual cost of material purchased and the standard cost of material used.
c. primarily the responsibility of the production manager
d. both a and c

Answer 1

The material price variance (computed at point of purchase) is the difference between the actual cost of material purchased and the standard cost of material purchased. It is the responsibility of both the production manager and purchasing manager.

Step-by-step explanation:

The material price variance (computed at point of purchase) is option a, which is the difference between the actual cost of material purchased and the standard cost of material purchased. This variance is used to evaluate the difference between the cost of materials that were actually purchased and the cost that was expected based on the standard. It helps in analyzing the effectiveness of the purchasing process and identifying any deviations from the standard cost.

The responsibility for the material price variance lies with both the production manager and purchasing manager, as they are responsible for managing the actual cost and standard cost of materials respectively.