Question

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

Answer 1

a) Standard quantity is the estimated quantity requirement for production basing on the previous consumption and records . Thus, option - a is incorrect

b) Material price is regulated (or) controlled by the purchase department and the quantity consumption is regulated (or) controlled by the production department.

As both the departments are distincts they set a value and quantityseperately by the respective department separately

c) Standard price will remain fixed for the particular budgeted period

Thus, option C is incorrect