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Advance Approval and the Filing of Form 970 Is Required

question 69

True/False

Advance approval and the filing of Form 970 is required whenever a taxpayer adopts LIFO.


Definitions:

Price Variance

The difference between the actual price paid for a purchase and the standard or expected price, usually applied to direct materials or direct labor costs.

Quantity Variance

A measure of the difference between the expected and actual quantities used in production, affecting materials or labor.

Overhead Absorbed

The overhead rate multiplied by standard units of volume.

Direct Labor Hours

The total amount of time spent by employees directly involved in manufacturing products or providing services.

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