Asked by Mathu Vicky on May 19, 2024
Verified
Standard costs are determined by multiplying expected price by expected quantity.
Direct Materials
Raw materials that can be directly traced back to the production of specific goods or services.
Standard Costs
Predetermined costs of manufacturing a single unit or a number of units during a specific period under normal conditions.
Expected Price
The anticipated market price of a good, service, or asset, often based on historical trends, current market conditions, and future forecasts.
- Understand the concept and purpose of standard costs in business operations.
Verified Answer
LV
Laura VilellaDurieuxMay 26, 2024
Final Answer :
True
Explanation :
Standard costs are indeed calculated by multiplying the expected price of each input by the expected quantity of each input, to estimate the cost of manufacturing a product or providing a service.
Learning Objectives
- Understand the concept and purpose of standard costs in business operations.