Asked by
SKARLETTE ROJAS
on Nov 13, 2024
Verified
If actual direct materials costs are greater than standard direct materials costs it means that
A) actual costs were calculated incorrectly.
B) the actual unit price of direct materials was greater than the standard unit price of direct materials.
C) the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.
D) the purchasing agent or the production foreman is inefficient.
Standard Direct Materials Costs
The expected or budgeted cost for direct materials which are those materials that can be directly associated with the manufacturing of a product.
Actual Costs
This refers to the genuine expenses incurred during the production or execution of a project, as opposed to estimated costs or budgeted amounts.
Unit Price
The cost assigned to a single unit of a product or service, facilitating price comparisons across different quantities.
- Gain a clear understanding of the association between actual financial expenditures, normative costs, and the analysis of variances.
Verified Answer
TF
Learning Objectives
- Gain a clear understanding of the association between actual financial expenditures, normative costs, and the analysis of variances.