The Fixed Overhead Variance That Indicates Whether Plant Facilities Were

question 5

Multiple Choice

The fixed overhead variance that indicates whether plant facilities were efficiently used is the

• A)budget variance.
• B)efficiency variance.
• C)spending variance.
• D)volume variance.

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Definitions:

Payables Financing

A form of short-term borrowing where a company finances its accounts payables through a third party.

Prompt Payment Discount

A discount offered to buyers for paying their invoices early, encouraging faster payments.

Pledged

Assets or collateral that a borrower offers to a lender to secure a loan, which the lender may seize if the loan is not repaid.

Default Risk

The risk of loss to a lender from the borrower’s failure to pay the full amount due including interest and principal.