In Order to Limit the Use of a Shell Company

question 95

Multiple Choice

In order to limit the use of a shell company, the SEC has proposed:

• A) Greater financial disclosures.
• B) Eliminating this type of company.
• C) Arresting promoters of shell companies for fraud.
• D) That its stock only be sold in foreign countries.

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Definitions:

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, calculated before the costs are actually incurred.

Labor-Hour

A unit of measure representing one hour of work by an employee, often used in costing and budgeting processes.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead allocated, based on the actual input of the allocation base.