What Is an Advantage of Using a Raw Materials Subsidiary

question 180

Multiple Choice

What is an advantage of using a raw materials subsidiary ledger?

• A) It includes only one large record for all materials used, so materials details are combined into one location.
• B) It is less detailed than the general ledger, giving a broader overview for decision purposes.
• C) It allows for better control of inventory because it tracks each type of material used in production.
• D) It contributes to easier recordkeeping since the sum of the balances of the subsidiary ledger do not have to match general ledger totals.

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Definitions:

Cost

The amount of money or resources expended to acquire an asset, produce a product, or provide a service.

Markup Percent

The additional percentage on the base cost of merchandise to accommodate for overhead and yield profit.

Selling Price

The amount of money for which a product or service is sold to the customer.

Cost

The amount of money required to purchase, produce, or maintain something.