Small Business Owners

question 9

Multiple Choice

Small business owners:

• A) Are more likely to rely on the financial accounting system to tell them how the business is doing than are managers of large enterprises
• B) Are more likely to rely on the management accounting system to tell them how the business is doing than are managers of large enterprises

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Definitions:

Direct Materials Price Variances

The difference between the actual cost of direct materials used in production and the standard cost expected to be used, showing how effectively materials costs are managed.

Direct Labor Rate Variances

The difference between the expected cost of direct labor per unit of production and the actual cost incurred.

Work in Process

Partially finished goods that are still in the production process at a specific point in time.

Current Period

The current period in accounting refers to the most recent or ongoing accounting period, for which financial activities and transactions are being recorded and analyzed.