Which One of the Following Most Closely Describes Net Material

question 79

Multiple Choice

Which one of the following most closely describes net material requirements?

• A) gross requirements - amount on hand - scheduled receipts
• B) gross requirements - planned receipts
• C) gross requirements - order releases + amount on hand
• D) gross requirements - planned order releases
• E) gross requirements - amount on hand + planned order releases

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Definitions:

Absorption Costing

An accounting method where all of the costs associated with manufacturing a product are absorbed by the units produced.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of production, such as rent and salaries of managers.

Fixed Manufacturing Overhead

The consistent, indirect costs associated with manufacturing that do not vary with the level of production, such as rent, insurance, and salaries of permanent staff.

Variable Costing

A costing method that includes only variable production costs (direct materials, direct labor, and variable overhead) in product costs, excluding fixed overhead.