The Difference in Standard Price and Standard Cost of Direct

question 8

Multiple Choice

The difference in standard price and standard cost of direct material is that

• A)Standard price is the amount to produce one unit of product; standard cost is the amount paid to obtain one unit of material from a vendor
• B)Standard price is the amount paid to obtain one unit of material from a vendor; standard cost is the amount to produce one unit of product.
• C)Standard price is the amount added to work in process as material is put into production; standard cost is the amount to produce one unit of product.
• D)Standard price is the amount to produce one unit of product; standard cost is the amount added to work in process as material is put into production.

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Definitions:

Note Receivable

A written promise for amounts to be received by a debtor, typically including interest, representing a credit instrument to the holder.

Specified Amount

A certain, defined quantity or sum mentioned in a financial document or agreement.

Definite Time

A specified, clear duration with a known start and end point.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.