The Direct Material Price Variance Is Based on the Quantity

question 71

True/False

The direct material price variance is based on the quantity of materials purchased when the quantity purchased is different from the quantity used.

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Definitions:

Retention Ratio

The proportion of net income that is retained by a company, rather than distributed to shareholders as dividends.

Receivables Balance

The total amount of money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Average Collection Period (ACP)

Measures the average number of days it takes for a company to collect payments from its customers.

Financial Planning

The process of creating strategies for managing financial resources to meet life goals.