If the Ratio of Total Liabilities to Total Assets Is

question 49

Multiple Choice

If the ratio of total liabilities to total assets is 0.5,long-term liabilities are $3,000,and equity is $5,000,then::

• A) you know that current liabilities must be $ 2,000.
• B) you know that current assets must be $400.
• C) you know that retained earnings must be $800.
• D) you know that preferred stock must be $400.

Calculate labor efficiency and rate variances to evaluate the effectiveness of labor utilization and wage rate management.

Compute variable overhead efficiency and rate variances to analyze overhead cost control.

Interpret variance analysis results to inform budgetary control and performance improvement strategies.

Apply the concept of variance analysis in different manufacturing scenarios to assess operational efficiency.

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Definitions:

Variable Overhead Spending Variance

The difference between the actual variable overhead incurred and the expected (or standard) variable overhead based on the actual level of production activity.

Standard Variable Overhead Rate

The predetermined rate used to allocate variable manufacturing overhead to individual units of production.

Standard Hours

The predetermined amount of time expected to complete a unit of work or job, serving as a benchmark for productivity and performance measurement.