The basic point in operation costing is that managers assume operation unit costs are the same regardless of the work order,but direct material costs:
A)are never relevant in the operation unit costs.
B)vary across orders when the materials used for each work order vary.
C)never vary across orders when the materials used for each work order vary.
D)can vary across orders but not when the materials used for each work order vary.
E)never vary across orders but only when the materials used for each work order vary.

Question

Quizplus · Accepted Answer

Operation costing assumes that operation unit costs are the same for each work order, but direct material costs can vary across orders when different materials are used for each work order. This is because direct material costs are directly tied to the materials used in the production process and will vary depending on the materials used.

The Basic Point in Operation Costing Is That Managers Assume