The Reasonable Person Standard Is

question 49

Multiple Choice

The reasonable person standard is:

• A) external and objective.
• B) external and subjective.
• C) internal and objective.
• D) internal and subjective.

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Definitions:

Actual Costs

The real costs incurred in the production of goods or in the provision of services.

Direct Labor Variance

The discrepancy between the expected (budgeted) cost of direct labor and the actual cost incurred during a production period.

Direct Labor Time Variance

The difference between the estimated time to produce a good and the actual time taken, often used in cost accounting.

Actual Costs

Actual costs are the expenses that a company incurs for producing goods or services, including materials, labor, and overhead, as opposed to estimated or budgeted costs.