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An NST may be ordered if the
Fixed Costs
Costs that remain constant regardless of the amount of goods produced or sold in a brief timeframe, including charges like rent, salaries, and insurance.
Units of Production
A depreciation method that allocates the original cost of an asset over its total estimated production capacity.
Direct Materials Cost Variance
The difference between the actual cost of direct materials used in production and the standard cost of those materials.
Direct Materials Quantity Variance
The difference between the actual amount of direct materials used in production and the expected amount, based on standards, multiplied by the standard cost per unit.
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