The Direct Materials Usage Ratio for a Given Period Is

question 67

Multiple Choice

The direct materials usage ratio for a given period is:

• A) Defined as the ratio of quantity purchased to quantity used.
• B) Defined as the inverse of the materials quantity variance for the period.
• C) Entered into its own variance account at the end of the period.
• D) A useful indicator of performance by the manufacturing department.
• E) A useful indicator of performance of the purchasing department.

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Definitions:

Tariff

A tax imposed on imported goods, usually to protect domestic industries or to generate revenue.

Economic Efficiency

A condition in which resources are allocated in such a way that maximizes the net benefit to society, ensuring that goods and services are produced and distributed in the most cost-effective manner.

Import Quotas

Limits set by a government on the quantity of a certain good that can be imported into a country, used to protect domestic industries.

Tariffs

A tax imposed by a government on goods and services imported from other countries, affecting the price and availability of those items.