General Knowledge · General Awareness
A regional manager of 'TechPro Ltd.' is consistently reporting large Adverse Material Price Variances. The manager defends this by arguing that the Procurement Department, which is centralized and located in the corporate head office, is responsible for all purchase decisions, including vendor selection and final price negotiation. As a management accountant, who should be primarily held responsible for the Adverse Material Price Variance, and what is the relevant principle of variance analysis?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The Finance Department, as the final price is determined by market interest rates.
- 2The Procurement Department, based on the principle of Controllability and Functional Responsibility.✓
- 3The Production Department, as they ultimately consume the material.
- 4The Regional Manager, based on the principle of Controllability.
Correct answer
The Procurement Department, based on the principle of Controllability and Functional Responsibility.
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