The presumed cause of a material price variance will determine how a company responds.

Question

Quizplus · Accepted Answer

If a material price variance is caused by external factors beyond the company's control, such as changes in market prices, the company may need to adjust their pricing or sourcing strategies. However, if the variance is caused by internal factors, such as inefficient purchasing or vendor relationships, the company may need to implement process improvements or negotiate better terms with suppliers. Therefore, the cause of the variance will determine the appropriate response from the company.

The Presumed Cause of a Material Price Variance Will Determine