The variance that is usually most useful in assessing the performance of the purchasing department manager is:
A)the materials quantity variance.
B)the materials price variance.
C)the labor rate variance.
D)the labor efficiency variance.

Question

Quizplus · Accepted Answer

The materials price variance is the most useful in assessing the performance of the purchasing department manager because it reflects the manager's ability to obtain materials at the most favorable prices. A favorable price variance means the manager was able to negotiate better deals and save the company money, while an unfavorable variance indicates inefficiencies in the purchasing process. The other variances listed are more directly related to production and labor, and would be useful in assessing the performance of manufacturing or other operational managers.

The Variance That Is Usually Most Useful in Assessing the Performance