Standard Costs Take into Consideration All of the Following Except

question 44

Multiple Choice

Standard costs take into consideration all of the following except:

• A)The cost of materials utilized to maintain production equipment
• B)The cost of labor used to operate the production machinery
• C)The cost of the sales manager's salary
• D)Factory overhead items that cannot be directly correlated to product production

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Definitions:

Retail Inventory Method

An accounting procedure for estimating inventory value by applying a percentage cost-to-retail price.

Inventory Value

The total cost or market value of all items held in inventory, including raw materials, work-in-progress, and finished goods.

FIFO Cost Flow Assumption

An inventory valuation method where goods purchased first are the first sold, assuming costs are charged in the order in which they are incurred.

LIFO Cost Flow Assumption

An inventory valuation method that assumes the last items added to inventory are the first sold, affecting the cost of goods sold and ending inventory value.