While an Exporter and Distributor Can Agree on What the Distributor

question 37

Multiple Choice

While an exporter and distributor can agree on what the distributor can add for margin on the wholesale price of goods,in agency contracts

• A) commissions are limited to U.S.$ 1.2 million per quarter.
• B) the commission is limited to 12 percent.
• C) the commission is whatever the agent decides it should be.
• D) commissions are set by the UCC.
• E) None of the above

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined overhead rate and actual activity level.

Standard Machine-Hours

A predetermined measure of the amount of machine time required to produce a unit of product under normal operating conditions.

Manufacturing Overhead

All indirect costs associated with the production process, including costs for utilities, depreciation of machinery, and factory staff salaries.

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours allowed for the work performed, multiplied by the standard labor rate.