CA Inter P4 · Chapter 12 · Question 10 of 10
An adverse material price variance is normally the responsibility of the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Purchase manager
Explanation
The price variance arises from paying more or less than the standard price for materials, which is controlled mainly by the purchase department. The usage variance is usually the responsibility of production. However, price variances may also arise from factors outside the purchase manager's control, such as general inflation or urgent orders demanded by production.
More Standard Costing MCQs
- Q2Using the same data (standard 4 kg at ₹25 per unit; actual output 2,000 units; actual usage 8,300 kg at ₹24), the material usage variance…
- Q3With the same data, the material cost variance is:
- Q4Standard labour per unit is 3 hours at ₹60 per hour. Actual output was 1,800 units. Workers were paid for 5,700 hours at ₹62 per hour…
- Q5Using the same data (standard 3 hours at ₹60 per unit; output 1,800 units; 5,700 hours paid of which 120 hours were abnormal idle time)…
- Q6The standard mix for a product is material X 60% at ₹20 per kg and material Y 40% at ₹35 per kg. In a period, actual input was 5,000 kg…