When Material Price Variances Are Recognised at the Time of Material

question 10

Multiple Choice

When material price variances are recognised at the time of material purchase, direct materials used are

• A) credited to the materials account at standard cost.
• B) debited to the work in process account at actual prices.
• C) credited to the materials account at actual cost.
• D) debited to the materials account at standard cost.

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Definitions:

Time to Expiration

Time to expiration refers to the duration until the expiry date of a derivative contract, such as options or futures, impacting its value and the strategies of investors holding or trading it.

Time Value

The concept that money available at the present time is worth more than the same amount in the future, due to its potential earning capacity.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified quantity of an underlying asset at a predetermined price before a specified date.

Intrinsic Value

Intrinsic value refers to the actual value of a company, stock, currency, or product determined through fundamental analysis without reference to its market value.