Walmart Deciding to Buy More Apparel Products from Lower-Priced Chinese

question 55

True/False

Walmart deciding to buy more apparel products from lower-priced Chinese manufacturers (rather than from somewhat more expensive apparel manufacturers in the United States)during the next six months is an example of an operational plan.

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Definitions:

Direct Materials Purchases Variance

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

Standard Costs

Predetermined costs for materials, labor, and overhead that are used as benchmarks to measure actual performance and cost control.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard quantity expected to be used, multiplied by the standard cost per unit.

Direct Materials Purchases Variance

The difference between the actual costs of materials purchased and the expected (standard) costs.