Obligations That May Arise from Past Transactions Only If Certain

question 48

True/False

Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities.

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Definitions:

Variable Overhead

Variable overhead are those operating costs that vary with levels of output or activity, including utilities, supplies, and certain labor costs.

Direct Material

Raw materials that can be directly traced to the manufacturing of a specific product and are a significant portion of the production cost.

Direct Labor-Hours

A measure of the time worked by employees who are directly involved in the manufacturing process.

Variable Overhead

Expenses that vary depending on the amount of production or business operations, like utilities or raw materials.