Fixed Assets That Provide the Basis for the Firm's Profit

question 4

Multiple Choice

Fixed assets that provide the basis for the firm's profit and value are often called

• A) earning assets.
• B) book assets.
• C) tangible assets.
• D) non-current assets.

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Definitions:

Labor Efficiency Variance

The variance between the real hours spent producing a good or service and the anticipated standard hours, times the standard wage rate.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the standard variable overhead expected for the actual production achieved.

Variable Overhead Efficiency Variance

A measure used in cost accounting to evaluate the efficiency of variable production costs, comparing the actual hours worked to the standard hours expected.

Materials Price Variance

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