Which of the Following Is True of the Comparison Between

question 38

Multiple Choice

Which of the following is true of the comparison between the Dow Jones Industrial Average (DJIA) stock index and the Standard & Poor's 500 (S&P 500) stock index?

• A)The S&P 500 has a broader index than the DJIA.
• B)All the firms included in the DJIA are large, whereas all the firms in the S&P 500 are small.
• C)The stocks considered for S&P 500 are picked by the editors of The Wall Street Journal, whereas the ones for DJIA are selected by the stockholders.
• D)All the DJIA firms are well-established, whereas all the S&P 500 firms are start-ups with low market value.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead allocated based on activity levels.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain level of output, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.