D&R Products Forecasts That It Will Require $10,000 for Equipment

question 17

Multiple Choice

D&R Products forecasts that it will require $10,000 for equipment and depreciation will be over five years. The $10,000 will be reflected in the balance sheet as

• A) inventory.
• B) gross fixed assets.
• C) net fixed assets.
• D) accounts payable.

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Definitions:

Labor Quantity Variance

Labor quantity variance measures the difference between the actual number of hours worked and the number of hours that should have been worked according to standards, multiplied by the standard hourly wage rate.

Direct Labor Hours

The total hours of work contributed by employees who are directly involved in the manufacturing process.

Normal Standards

Guidelines or benchmarks used for measuring or evaluating performance, quality, or compliance in various fields.

Production Contingencies

Unplanned or unexpected events that can affect the production process, requiring a company to adapt its resources or schedules.