Description
READ – Chapter Seven - Standard costs WRITE – a minimum of 200 words addressing the following questions:
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Explanation & Answer
Here you go....
Discussion 1
There are several problems that company might encounter when trying to determine the
actual cost of goods and services to be used in the cost of goods sold. These are material cost,
labor cost, and overhead cost. The first issue that company face is the material cost (Garrison,
Noreen, Brewer, & McGowan, 2010). Material cost is the cost that the company pays the price to
purchase the raw material for manufacturing the particular product, as raw material comes from
indirect materials, for example, sugar. We need to make Pepsi, and the amount which we pay for
the sugar is the material cost. The second issue is the cost of labor, as the labor cost is the cost
that ...
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