Rebates Are Partial Refunds on What a Customer Has Already

question 59

True/False

Rebates are partial refunds on what a customer has already paid for a product.

---

Definitions:

Direct Material

Primary materials used in the making of a product that can be directly traced to the finished good.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected (standard) cost, multiplied by the quantity of materials.

Labor Efficiency Variance

A measure used to assess the difference between the actual hours worked and the standard hours allotted to complete a task, multiplied by the standard hourly labor rate.

Variable Overhead

Refers to the indirect costs of operation that fluctuate with the level of production activity, such as utilities for manufacturing facilities.