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1. What are the components of a product’s standard cost?
The variable cost plus an allocation of the manufacturing operation’s facility costs.
The product material costs and labor costs.
The price charged to customers minus and discounts or rebates.
2. Which business function is responsible for setting the constraints on 70% of product costs?
3. What is a typical reason for converting product labor costs to material costs?
Internal people are more difficult to manage than suppliers.
Usually the overall product cost is lower.
Material costs are easier for Finance to track and manage than labor costs.
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