What Is the Net Effect on Appraisal Costs for the Current

question 35

Multiple Choice

What is the net effect on appraisal costs for the current year assuming the new receiving method is implemented and that 400,000 material units are received?

• A) $10,000 increase
• B) $10,000 decrease
• C) $100,000 decrease
• D) $110,000 increase
• E) $115,000 decrease

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Definitions:

Payroll

The total amount of wages, salaries, and other earnings paid by a business to its employees.

Labor Efficiency

The measure of the amount of work accomplished with a specific amount of labor input.

Labor Quantity Variance

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

Total Labor Variance

The difference between the actual labor costs incurred and the standard labor costs for the actual production achieved.