Which of the Following Realized Gains Results in a Recognized

question 13

Multiple Choice

Which of the following realized gains results in a recognized gain?

• A) Farm machinery traded for farm machinery.
• B) Sale to a related party.
• C) Involuntary conversion.
• D) Iowa cropland exchanged for a Minnesota warehouse.

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Definitions:

Labor Efficiency Variance

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

Direct Materials Purchases Variance

The difference between the actual cost of direct materials purchased and the expected cost of direct materials, based on standard cost.

Standard Direct Labor-Hours

The predetermined amount of labor time estimated or expected to produce a unit of output, used for budgeting and measuring efficiency.

Labor Rate Variance

The difference between the actual cost of labor and the budgeted or standard cost of labor.