Unfavorable materials price and quantity variances are generally the responsibility of the:

• A. Board of directors and external auditor, respectively
• B. Sales manager and marketing manager, respectively
• C. Chief financial officer and internal auditor, respectively
• D. Purchasing manager and production manager, respectively

Answer: (D)

Verified step by step guidance

1. Understand the concept of materials price variance: This variance occurs when the actual cost of materials differs from the standard cost. It is typically the responsibility of the purchasing manager, as they negotiate prices and select suppliers.
2. Understand the concept of materials quantity variance: This variance arises when the actual quantity of materials used in production differs from the standard quantity expected. It is generally the responsibility of the production manager, as they oversee the efficiency of the production process.
3. Analyze why the purchasing manager is responsible for unfavorable price variances: The purchasing manager's role includes sourcing materials at competitive prices. If prices are higher than expected, it may be due to poor negotiation or supplier selection.
4. Analyze why the production manager is responsible for unfavorable quantity variances: The production manager ensures that materials are used efficiently during production. If more materials are used than planned, it could indicate inefficiencies or waste in the production process.
5. Conclude that unfavorable materials price and quantity variances are generally the responsibility of the purchasing manager and production manager, respectively, based on their roles in managing costs and efficiency.