In pricing raw materials in manufactured products, auditors must consider both the unit cost of the raw materials and the number of units required to manufacture a unit of output.

Question

Quizplus · Accepted Answer

This statement is true. The cost of raw materials used in the production process is an important component of the overall cost of manufactured goods. The unit cost of raw materials must be multiplied by the number of units required to produce a single unit of output in order to accurately price the finished product.

In Pricing Raw Materials in Manufactured Products, Auditors Must Consider