When Recording the Use of Direct Materials in the Production

question 192

Multiple Choice

When recording the use of direct materials in the production process,raw materials inventory is credited for which of the following?

• A)Standard quantity of direct materials used for actual production times actual cost per pound
• B)Standard quantity of direct materials used for actual production times standard cost per pound
• C)Actual quantity of direct materials put into production times standard cost per pound
• D)Actual quantity of direct materials put into production times actual cost per pound

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Definitions:

Resource Consumption

The process of using up resources, such as raw materials, labor, and energy, in the production of goods and services.

Manufacturing Overhead

Manufacturing overhead encompasses all production costs except direct labor and direct materials used in manufacturing.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing more accurate costs of producing specific products or services.

Activity Rate

The cost driver rate used in activity-based costing to allocate expenses to cost objects based on their use of activities.