The Summary of Significant Accounting Policies Explains the Important Accounting

question 97

True/False

The Summary of Significant Accounting Policies explains the important accounting choices that the reporting entity uses to account for selected transactions and accounts.

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Definitions:

Direct Labour Hours

The total hours worked by employees that are directly involved in the manufacturing or production process.

Standard Cost

Standard cost refers to the predetermined cost of manufacturing a single unit or a number of units of product under current or anticipated operating conditions.

Standard Quantity

The predetermined amount of materials, labor, or overhead that should be used in the production process, serving as a benchmark for measuring efficiency.

Variable Overhead Spending Variance

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