If the Wage Rate Paid Per Hour Differs from the Standard

question 92

Multiple Choice

If the wage rate paid per hour differs from the standard wage rate per hour for direct labor, the variance is termed:

• A) variable variance.
• B) rate variance.
• C) quantity variance.
• D) volume variance.

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Definitions:

Construction in Progress Account

An account in the balance sheet that accumulates costs related to the construction of a long-term asset until the asset is ready for use, at which point the total cost is transferred to the fixed assets account.

GAAP

Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

Write-down

An accounting procedure reducing the book value of an asset when its market value drops below the recorded cost, resulting in a non-cash expense.