A Company with a High Level of Efficiency and Effectiveness

question 104

Multiple Choice

A company with a high level of efficiency and effectiveness is most likely to produce:

• A) a product that customers want, but that is too expensive for them to buy.
• B) a product that customers want at a quality and price they can afford.
• C) a product that is inexpensive and nondurable.
• D) a high-quality product that has limited utility for customers.
• E) a product that requires customers to invest in expensive service packages.

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Definitions:

Standard Direct Materials

The predetermined cost and quantity of materials required for the production of goods, used in budgeting and costing.

Direct Materials

Raw materials that can be directly identified and easily traced to the manufacturing of a final product.

Standard Materials Price

The predetermined cost per unit of material that is used for budgeting and cost control purposes in manufacturing.

Direct Materials

Raw materials that are directly incorporated into a finished product and are a significant part of the manufacturing process.