As Productivity in the Manufacturing Sector Increases, the Service Sector

question 89

True/False

As productivity in the manufacturing sector increases, the service sector must keep pace or it will become more expensive in the long run.

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Definitions:

Direct Material Price Variance

The difference between the actual cost of direct materials used in production and the expected (or standard) cost of those materials.

Cost Standards

The benchmarks or norms established for the cost of materials, labor, and overhead that are used in measuring and controlling performance.

Actual Results

The outcomes or data obtained from real operations or experiments, not based on forecasts or estimates.

Direct Material Price Variance

The difference between the actual cost and the standard cost of raw materials used in the production process.