Which of the Following Is an Example of How Managers

question 43

Multiple Choice

Which of the following is an example of how managers use production cost reports to control costs?

• A) setting product prices high enough for the company to be profitable
• B) providing cost of goods sold for the income statement
• C) determining if newer, more efficient equipment should be acquired
• D) promoting products that are most profitable

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Definitions:

Direct Material Price

The cost of raw materials that are directly used in the manufacturing of a product.

Actual Production

The real, quantifiable output of goods or services produced by a company during a specific period, as opposed to theoretical or planned production levels.

Normal Production

The standard or average level of production volume that a company expects to achieve under normal operating conditions.

Direct Labour Rate Variance

A financial measure that calculates the difference between the actual cost of direct labor and the estimated (or standard) cost.