The Lower-Of-Cost-Or-Market Test by the Auditors Is Generally Designed to Assure

question 13

True/False

The lower-of-cost-or-market test by the auditors is generally designed to assure that inventories are not valued above their net realizable values.

---

Definitions:

Kilos

A metric unit of mass or weight equal to one thousand grams.

Labor Efficiency Variance

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

Direct Labor-Hours

The total amount of labor time directly involved in manufacturing a product or delivering a service, often used as a basis for allocating overhead costs.

Variable Manufacturing Overhead

Overhead costs that fluctuate directly with the volume of production output, such as utilities and indirect materials.