Which Statement Describes Direct Materials in a Manufacturing Setting

question 99

Multiple Choice

Which statement describes direct materials in a manufacturing setting?

• A)Direct materials are used to determine total inventoriable product costs.
• B)Direct materials are used to determine total manufacturing overhead.
• C)Direct materials cannot be separately and conveniently traced.
• D)Direct materials do not become part of the finished product.

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Definitions:

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.

Current Consumption

The portion of income or resources that is spent on goods and services at the present time, as opposed to saving for future consumption.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased at given prices and within a given budget.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money that they borrow from a lender.