Asked by Alvin Sebastian on Jul 11, 2024
Verified
The standard price and quantity of direct materials are separated because
A) GAAP and IFRS reporting requires separation
B) direct materials prices are controlled by the purchasing department and quantity used is controlled by the production department
C) standard prices are more difficult to estimate than standard quantities
D) standard quantities change more frequently than standard prices
Standard Price
A predetermined cost that companies use for budgeting and assessing performance, often used in cost accounting.
Direct Materials
Raw materials that can be directly traced to the production of goods, considered a variable cost.
Production Department
A division within a company responsible for the actual production of the goods or services the company sells, involving processes like manufacturing, assembly, or processing.
- Compute and elucidate variances for direct materials and labor, encompassing both price and quantity discrepancies.
Verified Answer
Learning Objectives
- Compute and elucidate variances for direct materials and labor, encompassing both price and quantity discrepancies.
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