Which of the Following Is/are Not True Regarding the Raw

question 113

Multiple Choice

Which of the following is/are not true regarding the Raw Materials Inventory account?

• A)The Raw Materials Inventory account includes the cost of raw materials purchased but not yet transferred to the factory floor.
• B)The merchandising firm records purchases of raw materials as debits to the Raw Materials Inventory account.
• C)When the manufacturer physically transfers raw materials to the factory floor, it also transfers the cost of the raw materials from the Raw Materials Inventory account to the Work-in-Process Inventory account.
• D)When the manufacturer physically transfers raw materials to the factory floor, it records this transfer as a credit to the Raw Materials Inventory account for the cost of the raw materials transferred and a debit to the Work in Process Inventory account.
• E)all of the above

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Definitions:

Fixed Overhead Costs

Regular, unchanged costs incurred by a business, regardless of its level of production or activity, such as rent and salaries.

Control Perspective

An approach focusing on the monitoring and adjusting of processes and strategies to achieve desired outcomes or objectives.

Revenue Variance

The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.

Cost Variance

The difference between the expected cost of a project or production process and the actual cost incurred.