In developing a standard cost for direct materials a price factor and a quantity factor must be considered.

Question

Quizplus · Accepted Answer

A standard cost for direct materials includes a price factor, which represents the expected cost per unit of the material, as well as a quantity factor, which represents the expected amount of material needed per unit of output. Multiplying these two factors together results in the standard cost per unit of output.

In Developing a Standard Cost for Direct Materials a Price