If Actual Direct Material Costs Are Greater Than Standard Direct

question 96

Multiple Choice

If actual direct material 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.

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Definitions:

UCC

United States commercial ventures are directed by the broad legal standards set within the Uniform Commercial Code.

Shipment Contract

A type of contract specifying that the seller is obligated to send the goods to the buyer, but the risk of loss passes to the buyer when the goods are duly delivered to the carrier.

Tender Of Delivery

A requirement that a seller/lessor have and hold conforming goods at the disposal of the buyer/lessee and give the buyer/lessee reasonable notification to enable him or her to take delivery.

Risk Of Loss

A provision in contracts determining who bears the risk for damage to goods after purchase but before delivery.