In the JIT Environment,direct Materials and Conversion Costs Will Vary

question 140

True/False

In the JIT environment,direct materials and conversion costs will vary significantly for each product in a work cell.

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Definitions:

Raw Materials Price Variance

The difference between the actual cost and the standard cost of raw materials used in production.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount of materials that should have been used, measured at the standard cost.

Labor Efficiency Variance

The deviation between the actual hours taken to produce a unit of output and the standard hours expected, multiplied by the standard labor rate.

Materials Price Variance

The difference between the actual cost of direct materials and the expected cost at standard prices.