Which of the Following Is an Advantage of a Letter

question 60

Multiple Choice

Which of the following is an advantage of a letter of credit for an importer?

• A)The importer does not have to pay for the merchandise until the documents have arrived.
• B)Obtaining pre-export financing becomes easier.
• C)It helps the importer to get goods for a lower price.
• D)It results in lower shipping costs.
• E)The importer does not have to pay the third party a fee for facilitating the transaction.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to variations in production volume.

Fixed Overhead Budget Variance

This variance measures the difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs. It helps identify discrepancies in planned versus actual spending.

Direct Labor-hours

A measure of the labor time directly involved in the production of goods, used as a base for allocating overhead in some costing systems.

Fixed Overhead

Expenses that remain constant for a certain level of production or period of time, such as rent, salaries, and insurance, not directly tied to the level of production.