The Standard Unit Cost Is Used in the Calculation of Which

question 81

Short Answer

The standard unit cost is used in the calculation of which of the following variances? $\begin{array}{l}\text { Materials Price Variance } & \text { Materials Quantity Variance } \\\end{array}$
A) $\begin{array}{l}&&&&\text { No } & &&&&&&&&&\text { No } \\\end{array}$
B) $\begin{array}{l}&&&&\text { No } &&&&&&&&&& \text { Yes } \\\end{array}$
C) $\begin{array}{l}&&&&\text { Yes } &&&&&&&&&& \text { No } \\\end{array}$
D) $\begin{array}{l}&&&&\text { Yes } &&&&&&&&&& \text { Yes }\end{array}$

• A)\(\begin{array}{l}&&&&\text { No } & &&&&&&&&&\text { No } \\\end{array}\)
• B)\(\begin{array}{l}&&&&\text { No } &&&&&&&&&& \text { Yes } \\\end{array}\)
• C)\(\begin{array}{l}&&&&\text { Yes } &&&&&&&&&& \text { No } \\\end{array}\)
• D)\(\begin{array}{l}&&&&\text { Yes } &&&&&&&&&& \text { Yes }
• \end{array}\)

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Definitions:

Lower-of-Cost-or-Market-Value

An accounting principle requiring that inventory be recorded at the lower of either its historical cost or its current market value.

Book Value

The value of an asset as reported on a company's balance sheet, calculated as the cost of the asset minus any accumulated depreciation.

Impairment Model

Impairment Model is an accounting method that requires assets to be reviewed for impairment, whereby their carrying value is adjusted to reflect their recoverable amount if this is less than their current book value.

Indefinite-Lived Assets

Non-physical assets without a predefined expiry date in terms of economic benefits or usefulness.