If Actual Direct Materials Costs Are Greater Than Standard Direct

question 5

Multiple Choice

If actual direct materials 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:

Supply Chain

A network involving different sectors, teams, executions, data, and logistical support focusing on the passage of a product or service from the origin to the end-user.

Net Value

The actual worth of an asset, business, or investment after deducting all liabilities, obligations, or costs.

Enterprise Stages

The various phases or periods of growth and development that a business or organization goes through, from start-up to maturity.

Customer Request

A specific demand or requirement stated by a customer regarding the purchase or customization of a product or service.