According to the Joint New Standard for Revenue Recognition,issued by FASB

question 183

Multiple Choice

According to the joint new standard for revenue recognition,issued by FASB and IASB,which item below is NOT necessary?

• A)Identify the contract with the customer.
• B)Identify the separate performance obligations in the contract.
• C)Allocate the transaction price to the separate performance obligations in the contract.
• D)Recognize expenses as the entity satisfies the performance obligations.

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Definitions:

Direct Labor

Direct labor refers to the wages and salaries paid to employees directly involved in the production of goods or services.

Standard Labor Cost

The predetermined cost of labor that is expected for manufacturing a product or performing a service, used for budgeting and performance evaluation purposes.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost expected, used to assess labor cost efficiency.

Produced Units

Produced units refer to the quantity of goods manufactured or completed in a given period, indicating the production output level.