Which Statement Describes Direct Materials in a Manufacturing Setting

question 288

Multiple Choice

Which statement describes direct materials in a manufacturing setting?

• A)Direct materials are used to determine total manufacturing overhead.
• B)Direct materials are used to determine total inventoriable product costs.
• C)Direct materials cannot be separately and conveniently traced.
• D)Direct materials do not become part of the finished product.

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Definitions:

Purchase Price

The amount paid or required to be paid by the buyer for acquiring an asset or service.

Functional

Designed to be practical and useful, rather than solely attractive, particularly in reference to objects or systems.

Usefulness

The degree to which a product, service, or information fulfills a need or purpose.

Fixed Asset

A fixed asset is a long-term tangible piece of property or equipment that a company owns and uses in its operations to generate income. Fixed assets are not expected to be converted into cash in the short term.