The direct materials price standard should include an amount for all of the following except
A) receiving costs.
B) storing costs.
C) handling costs.
D) normal spoilage costs.

Question

Quizplus · Accepted Answer

The direct materials price standard should include a cost for the purchase price of the materials, transportation costs, and other costs associated with acquiring the materials, such as tariffs or duties. Receiving, storing, and handling costs are all costs that are necessary to get the materials ready for production and should be included in the direct materials price standard. However, normal spoilage costs should not be included in the direct materials price standard because they are a cost of production and not a cost of acquiring the materials.

The Direct Materials Price Standard Should Include an Amount for All