Answered: A direct material standard cost is:…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 13MC: Which of the following are prime costs? A. indirect materials, indirect labor, and direct labor B....

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Question

A direct material standard cost is:

Group of answer choices

The cost of direct materials that should be incurred to produce one unit of output or product.

The amount of direct materials that should be used to produce one unit of output or product.

The cost of all materials and supplies used to produce one unit of output or product.

The price that should be spent to purchase each unit of direct material for production.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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