In Which of the Following Circumstances Would It Be Acceptable

question 35

Multiple Choice

In which of the following circumstances would it be acceptable to record the material price variance at the time of usage of the materials?

• A) Where a fixed contract price is in place for the purchase of materials for a period.
• B) Where the purchasing manager is held accountable for all material price variances.
• C) Where the purchasing manager has little control over the price paid.
• D) Both where a fixed contract price is in place for the purchase of materials for a period AND where the purchasing manager has little control over the price paid.

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Definitions:

Goodwill

An intangible asset on a company's balance sheet that represents the premium paid over the fair market value of the acquired assets in a business acquisition.

Tangible Capital

Physical assets that are used in the operating activities of a business, such as buildings, machinery, and equipment.

Economic System

The organized way a country allocates resources and distributes goods and services in the national community.

Future Goods

Goods that are not yet produced or are not currently available but will be in the future.