New Financial Risk Situations Result from

question 58

Multiple Choice

New financial risk situations result from

• A)the changing composition of balance sheets.
• B)activities that do not appear on financial statements.
• C)overall growth of the financial system relative to the real sector.
• D)All of the above are correct.

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Definitions:

Budget Variance

The variance between what was expected to be spent or earned, according to the budget, and the real amount that was spent or received.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a specific activity base, such as labor hours or machine hours.

Fixed Component

The portion of total costs that remains unchanged regardless of the level of production or business activity.

Variable Overhead Rate

The cost of indirect manufacturing expenses that fluctuate with production volume, calculated per unit of activity or base.