Income That Is Included in Net Income Per Books but Not

question 108

True/False

Income that is included in net income per books but not included in taxable income is a subtraction item on Schedule
M-1.

---

Definitions:

Direct Labor Cost

The wages paid to employees who are directly involved in the production of goods or services.

Labor Rate Variance

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

Labor Efficiency Variance

The variance between the actual number of labor hours utilized and the anticipated standard labor hours for the achieved production volume.

Raw Materials Inventory

The stock of materials on hand that are used in the manufacturing process to produce goods.