A Decrease in Denominator Level of Activity Will

question 63

Multiple Choice

A decrease in denominator level of activity will:

• A) decrease the fixed portion of the predetermined overhead rate.
• B) increase the fixed portion of the predetermined overhead rate.
• C) decrease the variable portion of the predetermined overhead rate.
• D) increase the variable portion of the predetermined overhead rate.

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Definitions:

Accord And Satisfaction

A legal agreement between parties to settle a dispute by agreeing on a payment that is different from the original obligation.

Novation

The process of replacing an obligation to perform with a new obligation or substituting a new party to an agreement.

Anticipatory Repudiation

An assertion or action by a party indicating they will not perform their future obligations under a contract, allowing the other party to treat the contract as breached.

Objective Standard

A guideline used in law that is based on what a reasonable person would believe or do under the circumstances, rather than on the subjective intentions of the parties involved.