Unreasonable Standards May Be the Cause of Direct Materials Variances

question 65

True/False

Unreasonable standards may be the cause of direct materials variances, but not of direct labor variances.

---

Definitions:

Ownership

The legal right or state of having control over something, such as property or a business.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically for the financing of accounts receivable and inventories.

Short-Term Financing

Funding obtained for a period of one year or less, used to cover immediate needs such as working capital requirements.