When Jobs Are Completed, the Total Cost of the Job

question 135

True/False

When jobs are completed, the total cost of the job is recorded as a debit to Finished goods and a credit to Work in process.

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Definitions:

Direct Materials Quantity Variance

The cost associated with the difference between the actual quantity and the standard quantity of direct materials used in producing a commodity multiplied by the standard direct materials price.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the product's cost.

Direct Materials Quantity Variance

A measure of the difference between the actual quantity of materials used in production and the expected amount, indicating efficiency in material usage.

Direct Materials

Raw materials that are directly incorporated into a finished product and can be easily traced to it.