To Identify Any Possible Impairment of Manufacturing Equipment, the Auditor

question 80

True/False

To identify any possible impairment of manufacturing equipment, the auditor can tour the facility during operations to determine if any of the machines are idle.

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Definitions:

Variable Manufacturing Overhead

This refers to the expenses in manufacturing that vary in direct proportion to the volume of production, such as utilities and materials.

Standard Hours

The expected amount of time required to complete a task or produce a unit of product under normal conditions.

Variable Manufacturing Overhead

Expenses that vary with the level of production output, such as utilities and materials used in manufacturing.

Direct Labor-Hours

The overall hours logged by employees actively involved in the manufacture of a product or the rendering of a service.