Deferred Distribution Plans

question 39

Multiple Choice

Deferred distribution plans:

• A) are types of gain-sharing plans
• B) are devised to relate long-term profitability to top management performance
• C) place earnings in an escrow account for distribution upon retirement, termination, disability, or death
• D) are not as popular as current distribution plans because they lack immediacy
• E) are accurately described by all of the above

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Definitions:

Standard Hours

The predetermined amount of time expected to complete a task or job under normal conditions.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or cost objects, calculated in advance based on estimated costs and activity levels.

Direct Labour Hours

The total number of hours worked by employees directly involved in the manufacturing process or providing a service.

Variable Manufacturing Overhead

Costs that vary with the level of production output, such as utilities or commissions, which are indirectly associated with the manufacturing of products.