Normally, Standard Costs Should Be Revised When Labor Rates Change

question 87

True/False

Normally, standard costs should be revised when labor rates change to incorporate new union contracts.

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Definitions:

Average Inventory

Average inventory is a calculation that estimates the value or quantity of inventory a company holds over a specific period, helpful for assessing inventory management efficiency.

Carrying Cost

Carrying cost refers to the total cost of holding inventory, which includes warehousing, handling, depreciation, opportunity costs, and insurance.

Carrying Costs

Costs that rise with increases in the level of investment in current assets.

Average Inventory

The mean value of inventory over a certain time period, used for inventory management and planning.