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In the chapter, we said that the costs from a prior department are often excluded when comparing a department's cost with its standards or budgets.

In the chapter, we said that the costs from a prior department are often excluded when comparing a department's cost with its standards or budgets. However, when a department buys materials from an outside firm, those costs would almost always be part of the evaluation process. Why might a firm treat prior period costs differently for evaluation purposes from direct material costs purchased from another firm?

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