Fortune Corporation’s Marketing Department recently accepted a rush order for a non-stock item from a valued customer. The Marketing Department filed the necessary paperwork with the Production Department, which complained greatly about the lack of time to do the job the right way. Nevertheless, the Production Department accepted the manufacturing commitment and filed the required paperwork with the Purchasing Department for the needed raw materials. A purchasing clerk temporarily misplaced the paperwork. By the time the paperwork was found, it was too late to order from the company’s regular supplier. A new supplier was located, and that vendor quoted a very attractive price. The materials arrived and were rushed into production, bypassing the normal inspection processes (as directed by the Production Department supervisor) to make up for lost time. Unfortunately, the goods were of low quality and created considerable difficulty for Fortune’s assembly-line personnel. Which of the following best indicates the responsibility for the materials usage variance in this situation?
All three departments i.e. Marketing, Production and Purchasing department would bear the responsibility for unfavorable material usage variance. Marketing department is responsible because it accepted a rush order without analyzing the current production capacity. Production department is responsible because it allowed for bypassing of the normal inspection process. Purchasing department is responsible for delay in ordering the raw material.