If a Bank Desires to Hold No Excess Reserves,the Reserve

question 35

Multiple Choice

If a bank desires to hold no excess reserves,the reserve requirement is 8 percent,and it receives a new deposit of $500,

• A)its required reserves increase by $40.
• B)its total reserves initially increase by $460.
• C)it will be able to make a new loan of up to $492.
• D)All of the above are correct.

---

Definitions:

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or budgeted) cost, based on standard rates and actual hours worked.

Actual Costs

The real financial expenditures that a company incurs, as opposed to budgeted or estimated costs.

Standard Materials Quantity

The predetermined amount of materials expected to be used in the production of a single unit or a batch of product, under normal conditions.

Direct Labor Hour

A measure of the labor time specifically involved in the direct manufacture of products, not including indirect tasks.