A company wishing to isolate variances at the point closest to the point of responsibility will determine its material price variance when
A)material is purchased.
B)material is issued to production.
C)material is used in production.
D)production is completed.

Question

Quizplus · Accepted Answer

Material price variance is the difference between the actual price paid for material and the standard price. To isolate variances at the point closest to the point of responsibility, it is best to determine the material price variance when the material is purchased, as this is where the responsibility for negotiating and selecting suppliers lies.

A Company Wishing to Isolate Variances at the Point Closest