Which of the Following Methods Involves Capitalizing Exploration and Evaluation

question 28

Multiple Choice

Which of the following methods involves capitalizing exploration and evaluation costs using a larger cost centre than an area of interest such as a country of region?

• A) the area of interest method
• B) the successful efforts method
• C) the appropriation method
• D) the full cost method

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Definitions:

Materials Price Variance

The variance between the real expense of materials and their anticipated (standard) price.

Raw Material

The basic substances or components that are processed or used in the manufacturing of goods.

Direct Labor-Hours

The cumulative number of labor hours directly engaged in manufacturing goods or services.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.