1. Under a standard cost system, who is usually held responsible for the materials quantity variances?

A. The purchasing manager.

B. The production manager.

C. The sales manager.

D. The engineering manager.

2. General Mattress (GM) Company sells mattresses at a regular price of $800. The total cost per unit is $700, which consists of $200 direct labor per unit, $250 direct materials per unit, $50 fixed overhead per unit, and $200 variable overhead per unit. A hotel chain offered to buy 1,000 mattresses from GM at a discounted price of $650. This is a one-time special order (i.e., a short-term decision), and GM has enough spare capacity to accommodate this order. If GM accepts the special order, GMs operating income will:

A. Remain the same

B. Decrease by $150,000

C. Decrease by $50,000

D. increase by $50,000