Factoring Is the Sale of Payables to a Third Party

question 46

True/False

Factoring is the sale of payables to a third party at a discount from their face value.

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Definitions:

Standard Price

A predetermined cost that companies use as a benchmark to measure the performance of actual costs.

Fixed Overhead Volume Variance

The difference between the budgeted and applied fixed manufacturing overhead, based on the standard volumes expected to be produced.

Standard Quantity

The expected quantity of materials or inputs required for production under normal conditions.

Standard Hours Allowed

The amount of time that should be spent on producing a certain number of units under normal conditions.