After Negotiations That Involved Flightrax Limited, Nell Computers and Techfinance

question 77

True/False

After negotiations that involved Flightrax Limited, Nell Computers and Techfinance Leasing, itwas agreed that Techfinance Leasing would purchase computers from Nell worth $1.1 million to bedelivered to and used by Flightrax. This contractual agreement between Flightrax and Techfinance is an example of a direct lease.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the expected (standard) cost.

Labor Rate Variance

A measure used in cost accounting to analyze the difference between the actual labor cost incurred and the standard labor cost for the actual labor hours worked.

Variable Overhead Efficiency Variance

Refers to the difference between the standard cost of variable overheads for the actual production level and the actual variable overheads incurred.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost, indicating how well a company has controlled its labor costs.