The Major Advantage of a Flexible Spending Account Is

question 52

Multiple Choice

The major advantage of a flexible spending account is:

• A)that dependent care expenses are covered through the same account.
• B)the increases in employees' take-home pay.
• C)that unused funds revert to the employee.
• D)that the account covers unpredictable expenses.
• E)that it is regulated by the state tax code.

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Definitions:

Variable Overhead

Variable overhead are those operating costs that vary with levels of output or activity, including utilities, supplies, and certain labor costs.

Direct Material

Raw materials that can be directly traced to the manufacturing of a specific product and are a significant portion of the production cost.

Direct Labor-Hours

A measure of the time worked by employees who are directly involved in the manufacturing process.

Variable Overhead

Expenses that vary depending on the amount of production or business operations, like utilities or raw materials.