The difference in standard price and standard cost of direct material is that
A)standard price is the amount to produce one unit of product; standard cost is the amount paid to obtain one unit of material from a vendor.
B)standard price is the amount paid to obtain one unit of material from a vendor; standard cost is the amount to produce one unit of product.
C)standard price is the amount added to work in process as material is put into production; standard cost is the amount to produce one unit of product.
D)standard price is the amount to produce one unit of product; standard cost is the amount added to work in process as material is put into production.

Question

Quizplus · Accepted Answer

Standard price is the cost per unit of the direct material that is purchased from a vendor or supplier, while standard cost is the cost per unit of the direct material that is used in the production process. Therefore, the difference between standard price and standard cost of direct material is that standard price is the amount paid to obtain one unit of material from a vendor, whereas standard cost is the amount to produce one unit of product using that material.

The Difference in Standard Price and Standard Cost of Direct