Clarissa Is a Very Successful Self-Employed Real Estate Attorney

question 25

True/False

Clarissa is a very successful self-employed real estate attorney.She spends $5,000 per year taking her clients out to dinner upon completion of a sale.Unfortunately,Clarissa is not a good recordkeeper and does not maintain receipts.However,such meals are standard practice in her field,and trade journals indicate that $5,000 is a reasonable amount for a successful high-end attorney.Clarissa will be allowed to deduct $2,500.

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Definitions:

Labour Efficiency Variance

Labour efficiency variance is the difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate, used to assess workforce performance.

Standard Labour Rate

A predetermined rate of pay established for work performed, used in budgeting and costing calculations.

Price Variance

A variance that is computed by taking the difference between the actual price and the standard price and multiplying the result by the actual quantity of the input.

Direct Material

Direct Material includes raw materials that are directly incorporated into a finished product and can be easily traced to the product itself.