To Preserve Independence and Impartiality, the Financial Accounting Standards Board

question 147

Multiple Choice

To preserve independence and impartiality, the Financial Accounting Standards Board (FASB) members are required to:

• A) serve the board until their retirement.
• B) sever all ties with any firms or institutions they served prior to joining the board.
• C) sign a non-disclosure agreement and hand over all information of their previous companies to the board.
• D) pass a rigorous two-day, four-part examination on major accounting concepts.

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Definitions:

Direct Material

Raw materials that can be directly associated with the production of a specific product.

Predetermined Overhead Rate

An estimated rate used to apply manufacturing overhead to products or cost objects, calculated before the period begins based on forecasted costs and activity levels.

Estimated Labor-Hours

An approximation of the total hours of labor that will be required for a specific project or production period.

Variable Manufacturing Overhead

Costs in manufacturing that vary directly with levels of production, such as materials and labor directly involved in production.