If No Exceptions Were Found in the Substantive Tests of Transactions

question 99

Multiple Choice

If no exceptions were found in the substantive tests of transactions,

• A) ARIA would stay the same.
• B) the sample size would stay the same.
• C) ARIA would increase.
• D) the sample size would increase.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost rates.

Direct Labor-hours

The aggregate of hours expended by staff members actively participating in the manufacturing process, utilized to assign labor charges to various products.

Variable Overhead Efficiency Variance

This variance measures the difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate per hour.

Variable Overhead

Costs that vary in direct proportion to changes in the operational activity of a business, such as utility bills or raw material costs.