Q18RQ - Horngren'S Financial And Managerial Accounting

Question

List the eight product variances and the manager most likely responsible for each.

Step-by-Step Solution

Answer

The purchasing manager looks after the materials cost and the labor cost by the human resource manager. The production manager looks after efficiency variances and variable and fixed overhead variances.

Step 1 Definition of the production manager

A production manager is a person who is responsible for the production process of the company. Keeps cost and efficiency in check.

Step 2 Eight product variances and the manager is most likely responsible for each

Variances	Managers
Direct Materials cost variance	Purchasing
Direct material efficiency variance	Production
Direct labor cost variance	Human resource
Direct labor efficiency variance	Production
Variable Overhead cost variance	Production
Variable overhead efficiency variance	Production
Fixed Overhead cost variance	Production
Fixed overhead volume variance	Production