Which of the Following Attributes of a Bankers' Acceptance Greatly

question 20

Multiple Choice

Which of the following attributes of a bankers' acceptance greatly enhances its marketability?

• A) the authenticity of an accepted draft is separated from the underlying commercial transaction
• B) the accepted draft may not be dishonored for reason of a dispute between the exporter and importer
• C) the accepted draft is automatically guaranteed by the Ex im Bank
• D) a and b only

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Definitions:

Direct Labor Cost

The expense associated with labor directly involved in the production of goods or services, excluding indirect labor costs.

Overhead

A broader category of ongoing expenses not directly tied to specific products or services but essential for the business's day-to-day operations.

Machine-Hours

A measure of the amount of time machines are running in the production process, used to allocate manufacturing overhead costs.

Predetermined Overhead Rate

The rate used to allocate manufacturing overhead to individual units of production, based on estimated costs and activity levels.