In 2005, the Securities and Exchange Commission Approved New Rules

question 18

True/False

In 2005, the Securities and Exchange Commission approved new rules that for the first time required companies to include the cost of stock options in their earnings.

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Definitions:

Standard Cost Cards

Documentation that records the expected costs of materials, labor, and overhead for a product, used for budgeting and performance evaluation.

Work in Process

Work in Process (WIP) is an account used in inventory accounting that tracks the cost of materials and labor for products that are at various stages of production but are not yet completed.

Overhead Controllable Variance

The difference between actual and budgeted overhead costs that is directly manageable or controllable by management.

Fixed Overhead

Indirect costs of production that are not affected by the volume of production, such as rent, salaries, and utilities.