In Which of the Following Situations Would a CPA Be

question 96

Multiple Choice

In which of the following situations would a CPA be considered independent?

• A)A CPA's brother is the Vice-President of Sales at the CPA's audit client.
• B)A CPA's father was a salesman at the CPA's audit client,and now a major portion of the father's pension fund is invested in the audit client.
• C)A CPA's cousin works as a web-site designer at the audit client.
• D)A CPA's son works summers at the audit client and has earned 10 shares of stock in the audit client.

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Definitions:

Standard Costs

Standard costs are predetermined costs to manufacture a single unit or a number of units of a product during a specific period under current or anticipated conditions.

Direct Materials Price Variance

The difference between the actual cost of direct materials used in production and the expected (standard) cost of those materials.

Overhead

The ongoing business expenses not directly attributable to creating a product or service, such as rent, utilities, and administrative costs.

Standard Labor Hours

The set amount of time expected to be used to complete a specific task or manufacture a product under normal conditions.