97. CSO: 1B1e LOS: 1B1t
A company has a raw material price variance that is unfavorable. An analysis of this
variance indicates that the company’s only available supplier of one of its raw materials
unexpectedly raised the price of the material. The action management should take
regarding this situation should be to
a. negatively evaluate the performance of the purchasing manager.
b. negatively evaluate the performance of the production manager.
c. change the raw material price standard.
d. ask the production manager to lower the material usage standard to compensate
for higher material costs.
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