Which Department Is Typically Responsible for Direct Materials Price Variances

question 19

Multiple Choice

Which department is typically responsible for direct materials price variances?

• A) Sales
• B) Production
• C) Purchasing
• D) Engineering

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Definitions:

Traditional Cost System

A costing methodology that assigns manufacturing overhead based on volume-related measures, often neglecting the complexity or variety of activities.

Activity-Based Costing

An accounting method that assigns costs to products based on the activities they require, aiming to provide more accurate costing information.

Product Diversity

The range of different products or services offered by a business to meet various customer needs and market demands.

Overhead Resources

All indirect costs involved in running a business that cannot be directly attributed to a specific product or service.