The New Version of AASB 1023 Has Gone Some Way

question 30

Multiple Choice

The new version of AASB 1023 has gone some way to reducing the volatility in earnings but:

• A) Some volatility will remain with the required application of AASB 140.
• B) This volatility will be completely removed when the IASB complete their Insurance Project.
• C) The introduction of the requirement to apply AASB 9 will introduce further volatility to the accounts.
• D) Some volatility will remain with the required application of AASB 140 and the introduction of the requirement to apply AASB 9 will introduce further volatility to the accounts.

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Definitions:

Variable Manufacturing Overhead

Costs that vary with the level of production output and may include items such as utility expenses and raw materials.

Direct Labor-Hours

Total time spent by staff members who are directly part of the manufacturing operations.

Fixed Manufacturing Overhead

Fixed manufacturing overhead includes regular, consistent costs involved in manufacturing that do not vary with the level of production, such as salaries of managers and factory rent.

Job-Order Costing System

A cost accounting system that assigns manufacturing costs to a specific product or batches of products, often used in customized production environments.