An Advantage of the Single-Step Income Statement Over the Multiple-Step

question 27

Multiple Choice

An advantage of the single-step income statement over the multiple-step form is

• A)the amount of information it provides.
• B)its comprehensiveness.
• C)its simplicity.
• D)its use in calculating ratios.

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Definitions:

Direct Material Price Variance

The difference between the actual cost of direct materials used in production and the expected (or standard) cost of those materials.

Cost Standards

The benchmarks or norms established for the cost of materials, labor, and overhead that are used in measuring and controlling performance.

Actual Results

The outcomes or data obtained from real operations or experiments, not based on forecasts or estimates.

Direct Material Price Variance

The difference between the actual cost and the standard cost of raw materials used in the production process.