The Transportation Model Seeks Satisfactory, but Not Necessarily Optimal, Solutions

question 34

True/False

The transportation model seeks satisfactory, but not necessarily optimal, solutions for shipping goods from several origins to several destinations.

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, based on standards.

Direct Materials

Materials and supplies directly used in the manufacturing of a product and can be directly traced to the finished product.

Standard Cost Card

A document that details the standard quantities and costs of materials, labor, and overhead for a specific product.

Fixed Manufacturing Overhead

These are the production costs that do not change with the volume of production, such as rent, salaries, and insurance.