The Standard Direct Materials Quantity Does Not Include Allowances for

question 39

Multiple Choice

The standard direct materials quantity does not include allowances for

• A) unavoidable waste.
• B) normal spoilage.
• C) unexpected spoilage.
• D) all of the above are included.

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Definitions:

Opportunity Cost

The benefit that is missed or foregone when choosing one alternative over another.

Excess Capacity

A situation where a company's production facilities are capable of producing more than the demand for its products or services.

Direct Expenses

Costs that can be directly attributed to the production of specific goods or services, such as raw materials and direct labor.

Excess Capacity

The situation where a company can produce more goods or services than currently demanded, indicating underutilization of resources.