Depreciation Is Based on the Principle Of

question 60

Multiple Choice

Depreciation is based on the principle of:

• A)allocation.
• B)appropriation.
• C)lower of cost or market.
• D)approbation.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce goods and the standard hours expected, multiplied by the variable overhead rate.

Variable Manufacturing Overhead

Costs in the manufacturing process that fluctuate with the level of production activity, such as utilities and materials.

Direct Labor-hours

The full amount of labor hours by employees directly contributing to the generation of products or services.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on a standard rate.