The Standard Cost of Direct Materials Per Unit Is Calculated

question 217

Multiple Choice

The standard cost of direct materials per unit is calculated by

• A)multiplying the standard quantity of direct materials by the standard price of direct materials.
• B)dividing the standard quantity of direct materials by the standard price of direct materials.
• C)adding the standard quantity of direct materials to the standard price of direct materials.
• D)multiplying the actual quantity of direct materials by the standard price of direct materials.

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Definitions:

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Short Run

A period in which at least one factor of production is fixed, constraining the ability of a firm to adjust its output levels.

TVC

Total Variable Cost, which refers to the total of all costs that vary with the level of output or production activity.

Short Run

A period in economics during which at least one input, such as plant size, is fixed, and only some factors of production can be varied.