Adjudication of Drawer's Incompetence Will Not Affect the Bank's Ability

question 59

True/False

Adjudication of drawer's incompetence will not affect the bank's ability to act with respect to the drawer until the bank knows and has a reasonable opportunity to act on this knowledge.

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate, indicating efficiency in labor usage.

Direct Labor-Hours

Entire duration of work by employees intricately involved in the manufacturing phase.

Machine-Hours

A measure of production output or activity calculated as the total hours that machines are operated over a specific period.

Standard Hours Allowed

The amount of work time allowed for the completion of a task, against which actual hours are compared for performance analysis.