The standard price and quantity of direct materials are separated because:
A) GAAP reporting requires this separation
B) direct materials prices are controlled by the purchasing department, and quantity used is controlled by the production department
C) standard quantities are more difficult to estimate than standard prices
D) standard prices change more frequently than standard quantities

Question

Quizplus · Accepted Answer

Direct materials prices are typically controlled by the purchasing department, while the quantity used is influenced by the production department. By separating the standard price and quantity of direct materials, management can more easily identify and assess the effectiveness of these separate controls.

The Standard Price and Quantity of Direct Materials Are Separated