All Except Which of the Following Are First Determined by the Lessee

question 7

Multiple Choice

All except which of the following are first determined by the lessee before a direct lease?

• A) Equipment that will be leased
• B) What taxes will be paid based on the lease
• C) Options, warranties service agreements that must be made
• D) What price will be paid for the asset

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Definitions:

Variable Overhead Rate Variance

The difference between actual variable overhead incurred and the standard cost allocated based on activity level.

Variable Overhead Rate Variance

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

Fixed Manufacturing Overhead Budget Variance

The discrepancy between the budgeted fixed overhead costs and the actual fixed overhead incurred during production.

Fixed Manufacturing Overhead Volume Variance

The difference between the budgeted and actually applied fixed manufacturing overhead, based on standard costs for a given period.