The Short-Term Plan or Budget Involves Every Part of the Enterprise

question 29

True/False

The short-term plan or budget involves every part of the enterprise and is much more detailed than the long-term plan.

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Definitions:

Raw Materials

Basic materials that are used in the production process of manufacturing goods, which are then converted into finished products.

Standard Cost

A predetermined cost of manufacturing, labor, and material as estimated in accordance with standards set by the company.

Direct Materials

These are raw materials that can be directly attributed to the production process of a product, such as steel for a car or flour for a bakery.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost of those materials as budgeted.