Direct materials are allocated:
I. Very often at the beginning of the manufacturing process
II. Uniformly throughout the manufacturing process
III. At a different rate than conversion costs and, therefore, need to be valued separately for ending inventories
A) I only
B) I and III only
C) I, II, and III
D) I and II only

Question

Quizplus · Accepted Answer

Direct materials are allocated at the beginning of the manufacturing process and are valued separately for ending inventories compared to conversion costs. Uniform allocation of direct materials may not always be possible, especially in cases where a company uses different types of materials at different stages in the manufacturing process. Therefore, choice I and III are correct, but choice II may not always be accurate.

Direct Materials Are Allocated