COST ACCOUNTING
STANDARD COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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actual costs were calculated incorrectly.
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the actual unit price of direct materials was greater than the standard unit price of direct materials.
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the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.
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the purchasing agent or the production foreman is inefficient.
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Detailed explanation-1: -Raw material expenses refer to the cost of the components that go into a final manufactured product. They are one of three expenses included in a manufacturer’s cost of goods sold (COGS).
Detailed explanation-2: -Together, the direct materials, direct labor, and manufacturing overhead are referred to as manufacturing costs. The costs of selling the product are operating expenses (period cost) and not part of manufacturing overhead costs because they are not incurred to make a product.
Detailed explanation-3: -Raw materials are equal to direct materials. Manufacturing costs that cannot be classified as direct material or direct labour are classified as operating expenses.
Detailed explanation-4: -Answer: The difference between actual costs and standard (or budgeted) costs is typically explained by two separate variances: the materials price variance and materials quantity variance.