Establishing an Inventory of a Firm's Resources from the Annual

question 72

Multiple Choice

Establishing an inventory of a firm's resources from the Annual Corporate Report is:

• A)Difficult, especially because the intangible resources are not generally shown as assets.
• B)Easy - they're all listed there
• C)No good since the Corporate Report relates to the past, not the present.
• D)Irrelevant to the topic

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Definitions:

Raw Materials

Basic materials that are used in the production process of manufacturing goods, which are then converted into finished products.

Standard Cost

A predetermined cost of manufacturing, labor, and material as estimated in accordance with standards set by the company.

Direct Materials

These are raw materials that can be directly attributed to the production process of a product, such as steel for a car or flour for a bakery.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of those materials as budgeted.