Materials Must Have Which Two Qualities in Order to Be

question 169

Multiple Choice

Materials must have which two qualities in order to be classified as direct materials?

• A) They must be classified as both prime costs and conversion costs.
• B) They must be introduced into the process in both work-in-process inventories and finished goods inventories.
• C) They must be an integral part of the finished product, but can be an insignificant portion of the total product cost.
• D) They must be an integral part of the finished product and be a significant portion of the total product cost.

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Definitions:

Competitor

An entity that is in the same industry or market and vies for the same customers or resources.

Capital-Intensive

Describing industries or businesses that require a significant amount of capital investment to produce goods or services.