Question

Would a production manager follow up on a large direct-materials price variance over a large direct-materials quantity variance (if market price is actual price)?

Answer 1

The production manager would prioritize following up on a large direct-materials price variance over a large direct-materials quantity variance.

Step-by-step explanation:

The production manager would likely follow up on a large direct-materials price variance over a large direct-materials quantity variance if the market price is the actual price. This is because the direct-materials price variance relates to the cost of acquiring materials, which can have a significant impact on the overall profitability of the production process. On the other hand, the direct-materials quantity variance relates to the usage or consumption of materials, which may not directly impact the overall costs as much as the price variance.