The Terms of Sale Typically Specify Each of the Following

question 300

Multiple Choice

The terms of sale typically specify each of the following EXCEPT:

• A) Type of credit instrument.
• B) Credit period.
• C) Cash discount period.
• D) Cash discount.
• E) Probability of payment.

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Definitions:

Variable Manufacturing Overhead

Indirect production costs that fluctuate with the level of output, including utilities and supplies that vary with production volume.

Labor Rate Variance

The difference between the actual hourly labor rate and the standard rate, multiplied by the number of hours worked during the period.

Overhead Rate Variance

Overhead Rate Variance is the difference between the actual overhead costs incurred and the overhead costs allocated based on a predetermined rate.

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce an item and the standard hours expected, multiplied by the standard variable overhead rate.