Assume That SQ = Standard Quantity, SP = Standard Price

question 163

Multiple Choice

Assume that SQ = Standard Quantity, SP = Standard Price, AQ = Actual Quantity, and AP = Actual Price. The correct entry along with the equation to record the issuance and usage of materials, assuming a favorable materials usage variance, is as follows

• A) Work in Process SQ * SP
• Materials Usage Variance (AQ - SQ )SP.
• Materials AQ * SP
• B) Work in Process SQ * SP.
• Materials Usage Variance (AQ - SQ)SP
• Materials AQ * SP,
• C) Work in Process AQ * AP
• Materials Usage Variance (AQ - SQ)SP
• Materials AQ * SP
• D) Work in Process AQ * AP
• Materials Usage Variance (AQ - SQ)SP.,
• Materials AQ * SP
• E) None of these.

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Definitions:

Materials Planning

The systematic determination of required materials and components, including quantity and timing to support production.

Core Function

The primary and essential activities that a business or system is designed to perform.

MES

Manufacturing Execution System, a control system for managing and monitoring work-in-process on a factory floor.

Resource Management

The process of planning, allocating, and managing resources effectively, including human skills, assets, and materials.