Use the Information to Answer the Following Question(s)

question 39

Multiple Choice

Use the information to answer the following question(s) .
Jackson Automotive Inc. of California agrees to sell specialized automotive parts to Hidatsi of Korea. Because the two companies have never done business with each other, Jackson requires a banker's acceptance as payment for the $1,000,000 order. The banker's acceptance carries a 1.4% commission per annum and payment is to be received in 6 months. If Jackson Inc. chooses to discount or sell the bankers acceptance to its bank, the discount rate is 1.00% per annum.
-Refer to Instruction 19.1.________ is an unsecured promissory note.

• A)A banker's acceptance
• B)An overdraft
• C)A securitized loan
• D)Commercial paper

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Definitions:

Indirect Labor

Labor costs related to tasks that support the production environment but are not directly involved in creating the final product.

Variable Overhead Efficiency Variance

A measure used in managerial accounting to assess the efficiency of variable overhead costs incurred relative to the expected amount of those costs.

January

In the Gregorian calendar, the year begins with January, recognized as the first month.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead expected for the actual production level.