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The McMartin Preschool case demonstrates how
Direct Materials
The raw materials that are directly traceable to a finished product and are an integral part of the finished product.
Standard Costs
Predetermined costs for material, labor, and overhead used as benchmarks against which to compare the actual production costs.
Direct Material
Raw materials that are directly traced and assigned to the production of a specific product.
Materials Quantity Variance
The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit of material.
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