When using management by exception,the purchasing manager should be questioned for which of the following variances?
A) direct materials efficiency
B) variable overhead efficiency
C) direct materials cost
D) direct labor efficiency

Question

Quizplus · Accepted Answer

Management by exception is a management strategy where only significant deviations from expected results are brought to the attention of management. In this case, the purchasing manager should be questioned for direct materials cost because it is a significant cost factor that can have a significant impact on the overall cost of goods sold. The other variances mentioned (direct materials efficiency, variable overhead efficiency, and direct labor efficiency) are more related to production and would be better monitored by the operations or production manager.

When Using Management by Exception,the Purchasing Manager Should Be Questioned