Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Variance mcq on material usage variance
- This topic has 1 reply, 2 voices, and was last updated 3 years ago by
John Moffat.
- AuthorPosts
- August 8, 2020 at 3:33 pm #579652
Following are potential causes of material usage variance. State which one could properly explain adverse usage variance and at the same time indicate poor performance of production manager. Business has seperate managers for production, material purchase and machine maintenance
1) Selection of new supplier offering quality for lower prices
2) Inadequate training of newly recruited staff in production dept
3) Reduced quality material bought
4) Changes in production process causing extra material losses
5) Movt in exchange rate causing more expensive materials
6) Machine breakdown due to delays in annual maintenance scheduleSir correct ans is 2 and 4. Can you please explain me that why 1, 3 , 5 and 6 are wrong?
August 8, 2020 at 3:46 pm #5796551. Is wrong because if it is quality material it will not cause an adverse usage variance, and anyway it would not be due to the poor perforce of the production manage because he does not do the purchasing.
3. Is wrong because the purchasing is not the responsibility of the production manager.
5 is wrong because the cost will not affect the usage variance.
6 is wrong because machine breakdowns are due to the machine maintenance manager, not the performance of the production manager.
- AuthorPosts
- You must be logged in to reply to this topic.