When Assets Sold Within the Group Are Sold Later, but Within

question 19

True/False

When assets sold within the group are sold later, but within the same reporting period, to an external party, consolidated profit is then invariably the difference between the ultimate selling price and the original cost of the goods.

---

Definitions:

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or budgeted) cost, based on standard rates and actual hours worked.

Actual Costs

The real financial expenditures that a company incurs, as opposed to budgeted or estimated costs.

Standard Materials Quantity

The predetermined amount of materials expected to be used in the production of a single unit or a batch of product, under normal conditions.

Direct Labor Hour

A measure of the labor time specifically involved in the direct manufacture of products, not including indirect tasks.