Nathan Is Trying to Decide Which Shipping Company to Use

question 273

Multiple Choice

Nathan is trying to decide which shipping company to use to transport his custom-made furniture to customers. Nathan is facing a decision about

• A) order entry.
• B) order completion.
• C) just-in-time.
• D) order handling.
• E) order delivery.

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Definitions:

Standard Cost System

A cost accounting system that uses predetermined costs for materials, labor, and overhead charges to control actual costs and measure variances.

Material Variances

Material variances are differences between the actual costs of materials and the expected (or standard) costs.

Cost Variances

The difference between actual costs and standard or budgeted costs in business operations.

Standard Manufacturing Costs

The predetermined cost of manufacturing a single unit, including direct labor, direct materials, and manufacturing overhead, under normal conditions.