An Increase in the Time to the Promised Future Payment

question 56

Multiple Choice

An increase in the time to the promised future payment ________ the present value of the payment.

• A)decreases
• B)increases
• C)has no effect on
• D)is irrelevant to

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Definitions:

Variable Manufacturing Overhead

Costs in manufacturing that vary with the level of production output, such as electricity for machinery.

Variable Overhead Rate Variance

The difference between the actual variable overhead cost incurred during a period and the standard cost that should have been incurred based on the actual activity of the period.

Direct Labor-Hours

A measure of the total hours worked by employees directly involved in manufacturing a product or providing a service.

Overhead Budget

A financial plan estimating the expected indirect costs required to support operational activities within a certain period.