The Direct Materials Usage Ratio for a Given Period Is

question 137

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:

Maturity Phase

The stage in a product's lifecycle or a company's growth where sales growth slows or stabilizes as the market becomes saturated.

Capital Intensity

The amount of fixed or real capital present in relation to other factors of production, particularly labor.

Overlapping Demand

A situation where consumers' needs and desires partially coincide, leading to products or services being desired by multiple market segments.

Economic Background

The set of conditions including historical, geographical, and cultural factors that influence the economic activities and outcomes of a person or entity.