The Drawback of Centralized Inventory Is the Long Distance to Customers,which

question 36

True/False

The drawback of centralized inventory is the long distance to customers,which typically produces longer lead times and higher transportation costs.

---

Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the quantity that should have been used, valued at the standard cost.

Direct Material

The raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production cost.

Total Variance

The difference between the actual costs incurred and the standard costs, summarizing all variances in cost accounting to analyze overall performance.

Direct Labor Quantity Variance

This refers to the difference between the actual labor hours worked and the standard labor hours that should have been worked for the actual level of production, multiplied by the standard hourly wage rate.