Osbert Company is a canned cat food manufacturer. The basic meat ingredients are fish, pork and beef, and all of these ingredients are supplied by an outside vendor. The production Writing floor of Osbert Company is using a mass-production, assembly-line approach. This month, the production supervisor discovered that more meat was required to produce the same amount of cat food than in past months. The supervisor suspects that the outside supplier tried to cut costs by not trimming meat fat out. In cooking the meats, an increased quantity of fat would result in less processed cat food. When the production supervisor and other top managers received this month’s production report, the cost accountant indicated that the production supervisor is responsible for this month’s unfavorable material price and quantity variances. The production supervisor objected to being held responsible for these unfavorable variances.

Required:

Who should be held responsible for these unfavorable variances? Make recommendations for any needed changes in the reporting system.