If a Parent Has Some Control Over a Subsidiary but the Subsidiary

question 85

Multiple Choice

If a parent has some control over a subsidiary but the subsidiary is not consolidated,the subsidiary is accounted for as:

• A)a marketable security.
• B)an investment.
• C)a liability.
• D)a fixed asset.
• E)None of the answers are correct.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate manufacturing overhead costs to production activities based on a certain base, such as direct labor hours or machine hours.

Job Cost

The total cost associated with creating a specific product or completing a specific job, including materials, labor, and overhead.

Predetermined Overhead Rate

A calculated rate used to allocate manufacturing overhead costs to individual units of production, based on estimated costs and activity levels.

Direct Labor-hours

The total hours of labor directly involved in producing goods, used as a measure for costing and operational efficiency.