80.2K

Verified Solution

Link Copied!

Investigation of Variances Sommers Company uses the following rule to determine whether materials usage variances should be investigated: A materials usage varlance will be investigated anytime the amount exceeds the lesser of $12,000 or 10% of the standard cost. Reports for the past five weeks provided the following leformation Week MUV Standard Materials Cost $10,500 F 10,700 F 9,000 U 13,500 U 10,500 U $120,000 100,500 120,000 127,500 103,500 Required: Using the rule provided, identify the cases that will be investigated. Week 1 Week 2 Week 3 Week 4 Week 5 2. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of an unfavorable materials usage variance is the use materials than are normally used. who is responsible? What corrective action would skely be taken . The purchasing rd agent is responsible. Corrective action would require a return to the purchase of the higher quality material normally used gineri ree comtectivo actin would resure arseturm t the surduse f the Hioher qualty materlal sarmaly ued is responsible. Corrective action would require a return to the purchase of the higher-quality material normally used -ls responsible. If the relationship ef the variances is expected to persist, t then the new labor method Previousext more Check ly vork uses nemaining work saved

Answer & Explanation Solved by verified expert

See Answer