Which of the Following Is an Example of a Direct

question 191

Multiple Choice

Which of the following is an example of a direct materials efficiency standard?

• A) $40 per direct labor hour
• B) 50 square feet per unit
• C) $0.95 per square foot
• D) 6 direct labor hours per unit

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Definitions:

Nonparticipating

Typically refers to insurance policies or preferred stock where the holders do not have the right to share in certain dividends beyond the specified rate or in the surplus assets.

Dividends

Payments made by a corporation to its shareholder members. It is the share of profits and retained earnings that the company pays out to its shareholders.

Paid-In Capital

Funds raised by a company from investors through the issuance of stock, excluding any amounts derived from retained earnings.

Fair Market Value

The price that property would sell for on the open market between a willing buyer and a willing seller.