Direct material costs are locked in when they are:
A)sold.
B)designed.
C)assembled.
D)delivered.

Question

Quizplus · Accepted Answer

Direct material costs are determined and locked in during the design phase, as this is when the materials to be used in the product are specified. Once the design is finalized and production begins, the costs for these materials are unlikely to change significantly. However, once the product is assembled, delivered or sold, other costs such as labor, shipping and overhead may continue to vary.

Direct Material Costs Are Locked in When They Are