A Debit Balance in the Direct Materials Price Variance Indicates

question 99

True/False

A debit balance in the direct materials price variance indicates the standard cost of materials was more than the actual cost of materials.

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Definitions:

Processing Department

A specific department within a manufacturing facility where a particular stage of the production process is carried out.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on partially finished goods as a proportion of finished goods.

Process Costing System

An accounting method used to allocate costs to units of product in continuous or long-run production processes.

Weighted-Average Method

A costing method that assigns inventory and cost of goods sold values based on an average of the costs of all goods available for sale during the period, weighted by quantity.