A Company Can Change from One Acceptable Accounting Principle to Another

question 31

True/False

A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS.

---

Definitions:

Manufacturing Overhead

Costs in the manufacturing process that are not direct labor or materials.

Direct Labor-Hours

A measure of the labor directly involved in manufacturing a product, expressed in hours.

Predetermined Overhead Rate

A pre-determined rate for distributing overhead expenses to products or job orders, calculated prior to the beginning of the period using projected costs and estimated levels of activity.

Direct Labor-Hour

A direct labor-hour is a unit of measurement for the amount of work performed by employees who are directly involved in the production of goods or services.