How Is the Standard Quantity of Direct Materials Calculated

question 82

Multiple Choice

How is the standard quantity of direct materials calculated?

• A)The standard quantity of input per unit times the number of units actually made
• B)The standard quantity of input per unit times the number of units budgeted
• C)The number of units actually made times the direct materials price standard
• D)The budgeted quantity of units less the standard quantity of units

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Definitions:

Marginal Cost

The additional cost incurred to produce one more unit of a good or service.

Variable Cost Curve

A graphical representation that shows how total variable costs change with variations in output volume, helping firms visualize cost dynamics related to production levels.

Fixed Labor Cost

Expenses that do not change with the level of production or sales, such as salaries that must be paid regardless of the company's level of output.

Salaried Manager

A manager who is paid a fixed annual amount rather than an hourly wage, often receiving benefits such as healthcare.