The purchasing agent of the Charlton Company ordered materials of lower quality in an effort to economize
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The purchasing agent of the Charlton Company ordered materials of lower quality in an effort to economize on price. Due to a mistake in production scheduling by the production manager, the materials were rushshipped by airfreight at a rate higher than that ordinarily charged for shipment by truck, resulting in an unfavorable materials price variance. The lower quality material proved to be unsuitable on the production line and resulted in excessive waste. In this situation, who should be held responsible for the materials price and quantity variances? Explain.
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