Investigation of Variances Sommers Company uses the following rule to determine whether materials usage variances should be investigated: A materials usage variance will be investigated anytime the amount exceeds the lesser of $12,000 or 10% of the standard cost. Reports for the past five weeks provided the following information: Week MUV Standard Materials Cost 1 $10,500 F $120,000 2 10,700 F 100,500 3 9,000 U 120,000 4 13,500 127,500 5 10,500 103,500 Required: Using the rule provided, Identify the cases that will be investigated. Week 1 Week 2 Week 3 Week 4 Week 5 2. CONCEPTUAL CONNECTION Suppose investigation reveals that the cause of an unfavorable materiais usage variance is the use of lower quality materials than are normally used. Who is responsible? What corrective action would likely be taken? 1. The purchasing agent is responsible, Corrective action would require a return to the purchase of the higher quality material normally used. 2. The production engineer is responible. Corrective action would require a return to the purchase of the higher quality material normally used 3. The sales manager is responsible. Corrective action would require a return to the purchase of the higher quality material normally used. is responsible. If the relationship of the variances is expected to persist, then the new labor method