Because Support Department Costs Are Directly Related to Production, They

question 23

True/False

Because support department costs are directly related to production, they are easily applied to products.

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Definitions:

Indirect Materials

Materials used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Spending Variance

The difference between the budgeted or planned amount of expense and the actual amount spent.

Standard Costing System

A cost accounting system that assigns expected costs to products to help managers monitor and control actual costs.

Direct Materials

Raw materials that can be directly traced to the production of a specific product.