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An adverse material price variance is generally the responsibility of the
Aproduction department
Bsales department
Cquality control team
Dpurchase department
Answer & Solution
Correct answer: D. purchase department
1. A variance is only useful if it points at someone who could have acted differently.
2. Price variance arises from the price actually paid for material.
3. That price is negotiated and committed by the purchase department, so responsibility sits there.
4. Production controls how much material is consumed, which shows up in the usage variance instead.
5. Charging production with a price variance it cannot influence is the classic misuse.
_Source: ICAI Cost and Management Accounting Ch13 'Standard Costing', section 13.7.1(A)_
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