Which of the Following Documents Is Most Likely to Provide

question 55

Multiple Choice

Which of the following documents is most likely to provide evidence to support the validity of estimates used in a client's standard costing system?

• A) Variance reports.
• B) Consignment confirmations.
• C) Materials requisitions.
• D) Purchase orders.

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Definitions:

Direct Labor-Hours

The cumulative hours that employees engaged in the production process have worked.

Direct Labor Rate

The cost per hour for direct labor involved in producing goods or services.

Production Budget

An estimate of the total units that must be produced in a given period to meet sales demands and inventory requirements.

Net Operating Income

A financial metric that calculates a company's income after operating expenses are subtracted but before interest and taxes are deducted.