Which of the Following Is FALSE Regarding a Construction Loan

question 17

Multiple Choice

Which of the following is FALSE regarding a construction loan?

• A) It usually has a lower rate than does permanent financing
• B) It is also known as interim loan
• C) Hard costs can usually be financed
• D) The entire land cost can not usually be financed

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Definitions:

Overhead Controllable Variance

Overhead Controllable Variance refers to the difference between the actual indirect operational expenses incurred and the budgeted or expected overhead costs that could be influenced by management decisions.

Total Overhead Variance

The difference between the actual overhead incurred and the standard overhead assigned to production.

Overhead Variances

The difference between actual overhead costs and the standard (or expected) overhead costs for a period.

Standard Costing System

An accounting system that uses standard costs instead of actual costs for recording costs of inventory and cost of goods sold, tracking variances.