According to the Systematic Risk Principle, the Reward for Bearing

question 78

Multiple Choice

According to the systematic risk principle, the reward for bearing risk is based on which one of the following types of risk?

• A)unsystematic
• B)firm-specific
• C)expected
• D)systematic
• E)diversifiable

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Definitions:

Standard Labor Hours

The predetermined amount of time expected to be required to complete a task or produce a unit of goods under normal conditions.

Direct Materials Price Variance

The difference between the actual cost of materials used in production and the expected (standard) cost, indicating how effectively a company controls its raw material expenses.

Standard Labor Hours

The anticipated amount of time required to produce a unit of output under normal conditions, used in budgeting and variance analysis.

Direct Labor Time Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.