ECONOMICS

Detailed explanation-1: -The labor efficiency variance generally is also the responsibility of the production managers and supervisors. 8-6 The materials price variance can be computed either when materials are purchased or when they are placed into production. It is better to compute the variance when materials are purchased.

Detailed explanation-2: -Answer and Explanation: The production department is the one that is responsible for labor efficiency variance.

Detailed explanation-3: -Management is responsible for evaluation of variances. This task is an important part of effective control of an organization. When total actual costs differ from total standard costs, management must perform a more penetrating analysis to determine the root cause of the variances.

Detailed explanation-4: -Direct labor efficiency variance measures the cost of the difference between the expected number of labor hours required for the operations and the actual number of labor hours required for the operations.

Detailed explanation-5: -The production manager is usually held responsible for the labor efficiency variance. Whoever is responsible for the control of the denominator activity in the predetermined overhead rate should also be responsible for the variable overhead efficiency variance.