Question: Phantom Corp. has calculated its direct materials price and quantity variances to be ($500) favorable and ($800) unfavorable, respectively. Phantoms production manager believes that these

Phantom Corp. has calculated its direct materials price and quantity variances to be $$500$ favorable and $$800$ unfavorable, respectively. Phantom’s production manager believes that these variances indicate that the purchasing department is doing a good job but production is doing a poor job. Explain whether the production manager’s conclusions are correct.

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