The production manager of CLR Corporation calculated a material and unfavourable variance of $4,000 with respect to the cost of direct materials. Which of the following is a likely next step for the production manager?
A) Identify and discipline the responsible employee
B) Take actions to prevent the variance from recurring
C) Ascertain the cause of the variance
D) Switch suppliers for direct materials

Question

Quizplus · Accepted Answer

Before taking any action, it is important for the production manager to understand the cause of the variance. Only then can appropriate actions be taken to prevent it from recurring in the future. Identifying and disciplining a responsible employee may not solve the root cause of the problem, while switching suppliers may not be necessary if the cause of the variance is not related to the supplier.

The Production Manager of CLR Corporation Calculated a Material and Unfavourable